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San Francisco Public Library 


No^ to be taken from the Library 

3 1223 <=iolSl <?II7- 



The undersigned appraisers, appointed as above, do hereby, in accordance 
with said appointment, select as the third party, or umpire, to act 

in the matter of appraising, estimating and making the award of damages to 
the property in said appointment and agreement for appraisal specified. 

declaration of appraisers. 

State of \ 

County of J 

We, the undersigned, do each of us solemnly swear that we are not inter- 
ested, either directly or indirectly, as partners, creditors or otherwise with, 
or related to any of the parties to the foregoing agreement; that we will act 
with impartiality and fidelity in making an appraisement and estimate of 
the actual damage to the property of . insured by the , 

agreeably to the foregoing appointment, and that we will return to the said 
parties, a true, just and conscientious appraisement and estimate of damage 
to said property, pursuant to paid appointment, based upon the actual cash 
value of said property at the time the said damage was caused, taking into 
consideration all manner of depreciation from use or otherwise, according to 
the best of our knowledge, skill and judgment. 



Subscribed and sworn to by each of the parties \ 
above named this day of 188 



We, the undersignc d, having been chosen by the parties named in the 
above agreement, to appraise the damages to property insured under polio 
issued to the part of the first part by the , and which said 

property is specified in the foregoing agreement for appraisal, declare that 
we have carefully examined into the matter of the loss for which claim is 
made under said polic have taken into consideration the age, location 

and condition of the property iiaBugoctyatthe ti me of the fire, and, afte r 
making proper deductions for depreciation and for property saved, find that" 
the damage by fire and water to said property amounts to dollars, 

as follows, viz: 

On Total Sound Value, $ Damage, $ 

On Total Sound Value, $ Damage, $ 

On Total Sound Value, $ Damage* -■"$ 

r ire Underwriters Association of \\)e Pacific. 

Officers for the Year 1886. 

Z. P. CLARK President. 

J. W. STAPLES Vice-President. 

R. H. NAUNTON Secretary and Treasurer. 



Local Agents. 

Forms of Policies. 

Losses and Adjustments. 

Legislation and Taxation. 

Fire Department and Water Supply. 




"California Knapsack," GEO. F. GRANT, Editor. 




111 u 



Association of tipe I acific. 


SAN FRANCISCO, FEBRUARY i6th and 17TH, 1886. 



~ ^&&- 

Pire Underwriters Association of tr?e. Pacific. 
Officers fg. 4 iE Year 1885. 

C. MASON KINNE ^ President. 

Z. P. CLARK Vice-President. 

R. H. NAUNTON Secretary and Treasurer. 



Local Agents. 

Forms of Policies. 

Losses and Adjustments. 

Legislation and Taxation. 

Fire Department and Water Supply. 



"California Knapsack," GEO. F. GRANT, Editor. 

- ire Underwriters Association of tr>e Pacific. 

Tenth annual meeting, 


Tuesday > February 16. 

ANNUAL BEPOBT K. H. Naunton, Treasurer- 

ANNUAL ADDEESS C. Mason Kinne, President, 


LOCAL AGENTS Louis Mel, E. P. Farnsworth, Geo. F. Ashtox 


FOEMS OF POLICIES W. L. Chalmers, E. E. Potter, J. M. Thompson 



Wednesday, Ffbruary 17. 

LOSSES AND ADJUSTMENTS.. W. P. Thomas, C. P. Ferry, A. J. Wetzlar., 


LEGISLATION AND TAXATION.A. D. Smith, W.J. Landers, T.A.Mitchell 



A. E. Gunnison, T. E. Pope 


STATISTICS E. W. Carpenter, H. K. Belden, A. C. Donnell 


LIBEAEY Geo. W. Spencer, Wm. Sexton 


"Tenth Annual Meeting of the Fire Underwriters' Association of the 

Pacific, held at the Rooms of the Board of Fire Underwriters 

of the Pacific, 401 California Street, San Francisco, 

Cal., February 16th and 17th, 1886. 

OPENiNG Session. 

San Francisco, Tuesday, February 16th, 1886. 

The tenth annual meeting of the Fire Underwriters' Associa- 
tion of the Pacific was called to order at 10:30 a. m. 

President C. Mason Kinne, Special Agent of the Liverpool & 
London & Globe Insurance Company, in the Chair, and R. H. 
Naunton, with W. J. Callingham's Agency, Secretary. 

The following members were noted as present during the 
session : 

C. Mason Kinne, 
Z. P. Clark, 
Geo. J?. Grant, 

C. P. Farnfield, 
Wm. Sexton, 
W. L. Chalmers, 

E. W. Carpenter, 
Gen. Houghton, 
Geo. W. Spencer, 
Geo. D. Dornin, 
J. W. Staples, 

L. Mel, 

F. Jacoby, 
R. V. Watt, 

J. R. Hillman, 

D. B. Bush, Jr., 
H. B. Smith, 
D. J. Staples, 

R. H. Naunton, * 

T. L. Miller, 
C. D. Haven, 
Calvert Meade, 
A. C. Donnell, 
Geo. F. Ashton, 
C. B. McHenry, 
W. G. Elliott, 
T. J. Conroy, 
G. W. Dornin, 
A. J. Wetzlar, 

A. D. Smith, 
T. A. Mitchell, 
I. Manheim, 
C. E. Moody, 
L. B. Edwards, 
J. G. Edwards. 

B. Faymonville, 
M. S. Levy, 
Geo. W. Burns, 

H. K. Belden, 
W. S. Davis, 
H. B. Wheaton, 
Tom C. Grant, 
Geo. E. Butler, 
Wm. H. Lowden, 
Ben. E Ward, 
Oliver Hawes, 
F. T. Hoyt, 
A. F. Sewell, 
A. B. Gunnison, 

Visiting Agents. 

E. G. Sprowl, 
W. A. McKinder, 
N. B. Clapp, 
J. B. Richardson. 


Oq calling the meeting to order, the President said — We have 
much work to do, a good many papers to listen to, and there is 
HO necessity, that I can see, of waiting any longer for the absent 
ones. There is some little business to transact that pertains to 
our ordinary monthly meetings, in the way of election of new 
members, etc., and we will proceed to that first, and then go on 
with the regular order of business laid down for the annual 

Mr. McKinder, of St. Louis, was introduced to the Association 
as a visitor. 

The Secretary, Mr. E. H. Naunton, then read the minutes of 
the previous meeting, which were approved, and the following 
gentlemen were balloted for and elected as members of the 

E. B. Jennings, Special Agent of the Southern California In- 
surance Co.; Geo. W. Burns, Special Agent of the iEtna Insur- 
ance Co., and H. B. Wheaton, Special Agent with Brown, Craig 

The Secretary — I have the applications of C. Van Dyke Hub- 
bard, Special Agent with Hutchinson & Mann; W. F. Treffer, 
Special Agent of the Svea Insurance Co.; James S. Angus, As- 
sistant Manager Anglo-Nevada Insurance Co.; J. D. Richardson, 
Special Agent with Balfour, Guthrie & Co.; Ben E. Ward, Spe- 
cial Agent with Mr. Tom C. Grant, and Ed. C. Morrison, Special 
Agent State Investment and Insurance Co. 

President — The Secretary will give the proper notice. 

Mr. Sexton — I move that these gentlemen be invited to attend 
this meeting. As they cannot be elected until the next meeting 
I propose that they be invited to be present. 

Motion carried. 

The Secretary will take note of that fact, and during inter- 
mission see that the invitation is extended. 

Is there any other business to come before us of this charac- 
ter, Mr. Secretary ? 

Secretary — Nothing. 


President — Gentlemen, the first business in order to begin the 
regular proceedings of our annual meeting will be the report of 
our Treasurer, Mr. E. H. Naunton. Mr. Naunton will please 
read his report. 

Fire Underwriters 1 Association of the Pacific: 

Mr. President and Gentlemen — In submitting to you my Annual State- 
ment of Account as Secretary and Treasurer, I beg to call your attention to 
the fact that during the past year 25 new members have been admitted into 
the Association, the largest number in any one year since its organization. 
Four members have resigned, one of whom, Mr. C. T. Hopkins, an ex-president 
and one of our staunch and best friends, having retired from business, tend- 
ered his resignation, which was duly accepted, and on motion he was unani- 
mously elected as an honorary member. 

Two of our warm friends have left us during the year and gone over to the 
silent majority, and, although while we cherish their memories, it is hard to 
think we shall never see them amongst us again. 

Notwithstanding the efforts of our President during the year to make our 
monthly meetings interesting, I am sorry to say the attendance has been 
somewhat light, and therefore trust that some member will make a motion 
that our By-Laws be made to read in such a manner that a fine may be 
inflicted for non-attendance after due and sufficient notice from the Secre- 
tary, unless a constitution \l or sufficient excuse can be given. 

In concluding this short report, I beg to thank you all for the extreme 
kindness and courtesy I have always received at your hands, and remain 
Yours respectfully, 


Secretary and Treasurer. 


R. H. Naunton, Secretary and Treasurer, in account with the 
Fire Underwriters' Association of the Pacific. 

1885. Dr. 

Feb. 17. To balance from old account $64 28 

Dues— 96 at $2.50 $240 00 

Dues-2 at $1.25 2 50 

Dues— 6 at $1.00 6 00 

Dues— 1 at 50 

Entrance fees— 25 at $1 125 00 

374 00 

13 badges sold 32 50 

6 Waiver and Estoppel sold at 25 cents 1 50 

2 Annual Proceedings at 50 cents 1 00 

Total $473 28 



Feb. 19. C. P. Farufield, services as Secretary $50 00 

Expressage on chairs 1 50 

Maxwell & Holland (reporters of meeting) 34 50 

Dinner Committee (expenses) 31 00 

Stamped envelopes $2.85; 75 plain, 75 cents 3 60 

100 1-cent stamps 1 00 

Peplow <fc Goodwin (printing) 2 25 

Messenger and postage on papers 3 75 

Printing notices 75 

Key to Board room 50 

Geo. Spaulding & Co., Annual Proceedings 196 50 

Geo. Spaulding & Co., Annual Committees 5 50 

Delivering circulars.. 1 00 

E. C. Hughes, printing 4 00 

Delivering circulars, $1.00; Haynes' (notices) 75c. 1 75 

Geo. C. Shreve & Co., 6 badges 12 75 

100 1-cent envelopes 1 25 

Bosqui Publishing Co., printing 16 00 

100 1-cent stamps 1 00 

E. C. Hughes, printing, $8.75; Haynes' 75 cents.. 9 50 

Geo. C. Shreve, 6 badges 12 75 

Peplow & Goodwin, printing $1.00, badges $1.00. 2 00 

Peplow & Goodwin, 250 copies Constitution 16 00 

Copying Resolutions, to S. O. Hunt 1 00 

Baird <fc Henderson, printing 2 50 

O. M. Leopold & Co., floral decorations ..... 12 50 

E. A. Dakin, notices, $1.00, Jan. 1886, $1.00 2 00 

Baird k Henderson, printing 2 50 

250 envelopes, 50 cents; delivering notices, $1.00. 1 50 

Balance on hand '« 41 43 

ICaroh 3. 
































Total _S473_28 

The President— You have heard the report of your Treasurer, 
giving the financial standing of the Association at the present 
time, and the income and expenditure for the past year. It has 
been examined and approved by the Executive Committee. 
What action will you take in regard to the report? 

Upon motion it was ordered to be received and placed on file. 

The President—The next order of business you find laid down 
in the programme to-day is the so-called annual address of the 


President. As I am getting a little old I am obliged to get near 
the window, where there is more light. Not much light to be 
thrown on the subject, perhaps, but I will give you what I have. 


Gentlemen of the Fire Underwriters* Association of the Pacific: — While the 
duty of your President is to preside, appoint committees and to direct in 
certain matters as laid down in our Constitution; and while I find that there 
shall be reports from your Treasurer and Committees at our annual meet- 
ings, and no one else, yet custom has made for me a law not to be broken, 
and I find myself confronted with a duty that is at once pleasant and irk- 

The expected address by the President at the meeting which marks the 
formal close of ten good round years of our corporate life is pleasant to 
prepare, for talk is cheap, and you are all good listeners; and further, there 
is a satisfaction in turning over the cares and responsibilities of the posi- 
tion to some other one whom the Association may wish to honor. The task 
is irksome, because I feel the impossibility to say all that I might wish, and 
my inability to so phrase my ideas that they shall satisfy myself, much less 
the many bright minds we are proud to call members. 

To commence right, this being a sort of Tin Wedding Anniversary, it 
seems to me proper to furnish those of recent membership with 


The great fire in Virginia City, Nev., in October, 1875, necessitated the 
service of some thirty-four adjusters for companies doing business on this 
Coast, and the "Fire Underwriters' Association of the Pacific " was the legit- 
imate outgrowth of that congregation of members of the profession. For 
mutual protection and to facilitate the adjustment of the many losses there, 
a meeting was called for October 28th, in the " Palace Car," which was side- 
tracked and occupied by many of the fraternity, at which Mr B. F. Low was 
made Chairman, and J. W. Staples, Secretary. Meetings were held from 
day to day and proved of great advantage to all concerned. 

At the meeting of November 13, 1875, the idea of a permanent organi- 
zation took definite shape, by the adoption of resolutions perpetuating the 
Association as "a means of disseminating valuable information and elevat- 
iug and promoting the interests of its members." A committee consisting 
of L. L. Bromwell, H. H. Bigelow and J. E. Garniss was appointed to draft 
a Constitution and By-Laws, who made their report at a meeting called for 
the purpose and held in San Francisco, February 23, 1876, at which time 
the present Association was permanently organized. 

Founded on the broadest principles of united effort, our Pacific Association 
has corrected abuses, induced thought, fostered correct practices, produced 
valuable essays and statistics, and from its very inception has steadily in- 
•creased in membership and influence. 



and the success of our little society is an evidence of this. At our annual 
tinga and monthly gatherings of lesser numbers, questions have been 
discussed and ideas crystallized which each one of us is satisfied have brought 
more or less good into the business. It is a matter of give and take. We 
impart a little from our store of experience and receive information at the 
time. It needs just such organizations as ours to prevent the faith- 
ful worker from becoming too much of a specialist; too narrow in his ideas 
and methods of carrying them out. We all need breadth of thought without 
rficiality. We get at the ideas and methods of others by this summing 
up of results and modes of thought, and in this sense our society is a school 
of instruction for the apt and ardent pupil, who enters a tyro, continues a 
nt. and graduates a scholar, well up in his class. That is, of course, 
if he finds himself of an assimilative turn of mind, and is born with traits 
that tit him for the proper digestion of the pabulum offered and placed to his 
willing lips. Not to be willing to aid those who step into our ranks, is sel- 
fish in the extreme, and will often result in personal disadvantage, for there 
arc none possessed of such a wealth of knowledge on any subject but can 
learn something more. 

Again, no matter how gray our hair has become in the pursuit of legiti- 
mate premiums and honest losses, the man who works away in his own little 
corner, shutting his eyes to all the rest, diminishes the chances of seeing 
what is in that corner. Dry rot is the most insidious of all the destructive 
funguses, and when you once begin to wither from its effects, it is almost 
too late to avert the spread of the mycelial poison. 

It is now twenty years since I first drew breath — and salary — in the insur- 
ance business, and as I get older am learning something new every day — es- 
pecially my ignorance. If our Association has done nothing else, it has 
;t the men who have been engaged for six months or a year in the in- 
surance business that they do not know everything. 


who used to think that he knew all about fire insurance— past, present and 
future— has become a thing to weep over as we gaze upon the marble slab 
that marks his official resting place and read the pertinent epitaph "abnormis 
is.* 1 Yes, those who were wise without instruction have been hurried 
into an early tomb by ours and kindred societies. 

let while we have driven a good deal of common sense into the Adjuster, 
and knocked some nonsense out of some of the wise heads in some of the 
back offices, we must not get too egotistical. Properly speaking, we are 
an association of Adjusters and Specials, yet there is now and then a ten- 
dency to run into the domain of the Manager. Now, ye Manager likes 
ability and fondness of work in his Special; he likes an apt, thoughtful, 
tireless Adjuster; but for goodness' sake, leave the man at the wheel a little 
something to do. He is the responsible man, and must answer for all sins 


of omission and commission; is held accountable for reduced premiums 
and increased losses; stands between excessive commissions and lowered 
dividends, and generally has lots of trouble on his mind. Let him have it. 
He is welcome to it, but we can come back to him from the field with 
smiling faces and cheerful demeanor, even if we have been beaten by a de- 
faulting agent or an unscrupulous claimant. Of course, now and then, 
when we have done the very best we could — the best any one could with 
the material at our disposal — we may expect to be offered up as a vicarious 
atonement for lack of executive ability, a sacrifice to unwise economy and 
larger official salaries. Whether the home of the parent office be in Oak- 
land or Glasgow, these things will happen, but the active, working, think- 
ing Special need never have any fear for his future. Yet while he thus is in 
demand he cannot stand alone. He must attend our meetings during the 


Friction is a great thing in this world, for properly analyzed, it is almost 
creation. As the impact of the solar ray upon inert matter is the vivifying 
influence that imparts form and beauty and strength to inanimate parti- 
cles, so the touch of a valuable thought imparts to the mind of another, new 
thoughts and brightened intellect. By attending our meetings, better than 
any other means, can this good be accomplished and can we better learn of 
the magnitude and absolute dependency of one upon the other. 


of any class of business. Stockholders put up coin and trust directors, di- 
rectors trust officers, officers trust department managers, managers trust 
specials, specials trust local agents, agents trust the assured. The assured 
becomes a claimant and trusts the local, the adjuster, the manager, the 
officers and the company to pay him his loss. The relations are all close but 
distinct, and the moving, active principle is the Special and the Adjuster. 
His presence and abilities permeate the whole, and upon him greatly de- 
pends the wholesome consideration given any insurance company by the 
assured, whether as a payer of premiums or collector of losses. 

Talking to you as Specials, let me advise you to try and become an all- 
round Special. Don't degenerate into the diagram^tia Special; don't slide 
round as a seductive Special, leading your agents to hanker after illegitimate 
things; don't try the role of the pompous Special. Be a man all the time, 
with a growing knowledge of your profession. Impart what you know of 
the hazards of risks, encourage the newly appointed and diffident local, 
and have them all paste this general maxim in their hat: 

don't take a risk to-day that you would be ashamed of if it burned 


This is the key-note. It means that the man is safe to deal with, that 
the moral hazard is good. It means that the valuations have been looked 


that the diagram is correct and all exposures properly represented. 

It iiu ans that aside from the rate-book as a fundamental guide, the local has 

i an adequate rate. With the moral hazard, physical hazard, values 

ami rates all right, the loss may come at any time and the well seasoned or 

newly Hedged local will have no fears in meeting the Adjuster. 

Bui I certainly have dealt in generalities long enough. Let me speak 
of what we have done in our Association during the year. 


i well attended. We have discus.ied many topics, in addition to the 
rale which was adopted at our last annual meeting regarding the "Appor- 
tionment of Loss under Non-concurrent Policies." We have formulated 
our ideas into resolutions fixing "Adjusters' Fees and Expenses," the "Con- 
tribution to Adjusting Expenses," both with and without the " Adjuster's 
Clause," and regarding "Agents as Adjusters." These have all been 
printed and sent out to the companies and Adjusters, and we find harmony 
Jting where discord prevailed. We have revised our Constitution and 
By-Laws; discussed the co-insurance clause; talked about the broker as a 
claim agent; studied over the judiciousness of managers acting as trial jur- 
u adjustments made in San Francisco; decided what should be deducted 
from a policy when part of a damaged stock was taken at its appraised value, 
and generally done a deal of thinking. 


have been instructed to inaugurate a new departure in the way of their re- 
ports at this meeting. It is expected that each member will present his in- 
dividual ideas in writing and not unite in a joint report; the same idea dif- 
ferently expressed is often thereby made more impressive. I anticipate 
good results from this method. Shorter papers, more tersely written and 
the same topic differently treated. Some committees will, no doubt, appor- 
tion their work under this new "Kinne rule," and equitably divide the labor 
and honor instead of one of the three bearing the laboring oar. In addi- 
tion to these reports, I have asked for special addresses on varying topics 
from various members, as you see announced, which will, I think, add to the 
interest of the meeting. 

Before closing, it becomes my duty to mention the decrease of our numbers 
1 y the death of two of our members, whose familiar faces can no longer be 
seen among us, but whose memory will be ever green in the minds of all 
who have been associated with them in our profession. As they are 
" mustered out," others step in to fill the vacant ranks, but the words of 
counsel and the congenial atmosphere of A. P. Flint and S. O. Hunt will 
never be forgotten. 

And now, gentlemen, consider this address as simply an introduction to 
the intellectual feast to come. Digest the various dishes that will be set 
before you, looking well to the meat that is in them and not to their gar- 


nishment. Chicken salad is often made of veal, so look out for sophistries, 
but yet remember that out of the mouths of babes often cometh wisdom. 
Not much, but some — and for what we are about to receive may we be truly 

The President — We will now listen to the report of our Ex- 
ecutive Committee, through its Chairman, Mr. Geo. F. Grant. 

Mr. Grant — The Executive Committee have to report the As- 
sociation in the prime of its life and in good health. We have 
examined the account of the Treasurer and found it correct, and 
the Committee think it wise, considering the number of papers 
to be read, to take up no further time at this meeting. 

The President — If there is no objection, this verbal report of 
the Committee will be received as the report of the Committee. 
Hearing of no objection, it is so ordered. The first on our list 
of General Standing Committees is that of ' 'Local Agents/' and 
we find on the programme at this point the names of Louis 
Mel, E. P. Farnsworth and Geo. F. Ashton, and papers 
are expected from each. The first one to be called upon is Mr. 

Mr. Mel — I have written an article, but I am not satisfied 
with it, and so I would rather not read it. 

The President — This is rather a sorry commencement for our 
new rule, of each committeeman preparing a paper. We will 
try Mr. E. P. Farnsworth. 

Mr. W. L. Chalmers — You have called upon Mr. Farnsworth,. 
but he is not here to respond. 

The President — I will next call upon Mr. Geo. F. Ashton. 

Mr. Ashton — I have not prepared a paper for the reasons I 
have already stated to the Secretary. I believe there was some 
error in my address, and I did not know that I was expected to 
prepare anything. 

The President — I understood from Mr. Farnsworth that he 
had prepared a paper. Mr. Mel said he had one. His excuse 
you have heard. Mr. Farnsworth having made no excuse, he 


Will bt liable to censure if he has not prepared a paper for this 
Ann ial Meeting. Mr. Secretary, you will see that Mr. Ashton's 
address is correctly entered. Next on the programme is a paper 
by Mr. Geo. F. Grant upon the Influence of Association. We 
will certainly have the pleasure of listening to a valuable paper 
upon this topic that will compensate somewhat for the inauspic- 


Mr. President and Gentlemen — The influence of association commences 

with earliest recollections at a mother's knee, it grows with our growth, 

gaining strength daily according to the circumstances of our lives and the 

le with whom we come in contact. It finds definition in such old say- 

A man is known by the company he keeps," "Evil communica- 

corrupt good manners," "Birds of a feather flock together," etc. 

The object of this paper, however, is to narrow the subject, treating of 

class of men engaged in the same business. The word association as 

I will more particularly apply to a society of individuals united or 

joined in interest, in which the influence is to move or direct by moral 

p< >\ver. In insurance affairs the influence of association tends to reconcile 

theory and practice. 

There is my paper in condensed form; I wish for your sake and mine it 
closed thus; that customary courtesy due our respected President required 
n< » further verbiage. In the matter of directing insurance people by moral 
r, experience has plainly shown that a full and free discussion, followed 
by a deliberate ballot, is fair and convincing. It is unwise to attempt to 
crowd an issue or to overpower a minority in haste, simply because of 
.gth in numbers; such a course breeds discontent. Much more in- 
judicious is he who endeavors to force reform in an individual capacity; 
there is a latent suspicion of an ulterior motive, if not, then as a crank 
he loses his influence. 

Moral power asserts an unconscious influence on all deliberations, but 
to claim morality as the basis of an argument is a risk, being suggestive of 
camp meeting tactics, often resulting in charges, counter-charges aud a 
cross fire of explanation. He who stands head and shoulders above his as- 
sociates in moral reputation is a brief speech-maker, but he wields a modest 
power which often decides a ballot; his influence has been known to dissolve 
a majority even when they were pledged among themselves for an object; 
such men are safe instructors, guides and friends. 

By means of an association the best there is in every member is concen- 
trated on affairs of general interest, by means of discussion the subject in 
hand is thoroughly ventilated, by means of the ballot a record is made by 
which individual reputation becomes established; when an individual loses 


his influence he subsides, but when a society loses its influence it dies. Did 
you ever know an association to die when the majority were for the best good 
to the greatest number? Never ! 

There is a distinction to be noted between the influence of a misguided 
person and one morally indifferent; observe the man full to the brim of 
health and vitality, his very opinions are robust, his language is vigorous, 
he overrides opposition with such fiery speech and action that he carries mo- 
mentary conviction by his audacity, by mere will power; when defeated 
he still fights. If on reflection he sees fit to change his views, he boldly 
makes the announcement without a blush or the quiver of an eyelash, his 
influence is felt, he keeps the troubled waters ever at a boiling point, he 
exposes many an error and helps to correct many an evil; he can move, but 
he has not the moral force to control % the association. He can be skillfully 
captured by those desiring a volunteer for a forlorn hope, and is generally 
known as the leader of the opposition. You know where to range him every 
time, which is more than can be said of the morally indifferent person. In 
him we have a subtle malcontent, the effect of whose schemes may not be 
noted until a serious mischief is done. The influence of association on such 
a one is to gradually narrow the power to do harm by exposing each trick 
as found; his fertility of brain exhausts itself in time, and the longer the 
association holds together the worse for him and the better for all others 

Then again, minds become broadened by frequent contact with important 
subjects; a silent listener absorbs information, and often surprises his asso- 
ciates by a sudden display of knowledge of which he was not suspected. 
Discussion is a practical educator. It is true of all students that mere 
theory or book learning unfits them for the world of business. He who can- 
not impart to others, or who is unwilling to share the jewels of his mind 
with his associates, is neglecting one of God's best gifts to man, he leads a 
selfish, unsympathetic life, takes his brilliant gifts out of the world at death, 
and like a sponge, having absorbed to the full of its capacity, gives back 
nothing but a suggestive odor or a spot to mark its resting place. 

How best to control the ideas of man so that the working of our business 
may be exalted, is now and ever has been a problem. To combine theory 
and practice is to reach perfection. Of all the toilers engaged in matters of 
fire insurance, I believe the special agent to more nearly accomplish this re- 
sult; he has this advantage over his superior officer: he has time to devote 
to one object until it is completed. In the field everything favors him. 
He receives attention as a visitor; he has the ear of the whole community; 
the quiet of the interior rests and refreshes him; there is an Arcadian 
simplicity about the people with whom he transacts business strongly at 
variance with city manners; he delivers his opinions to an audience satisfied 
to listen and willing to be convinced. Now, if the influence of association 
is on these special agents as they come and go; if they are of the same gen- 
eral opinion in regard to the practical working of the business, rivals 
though they be, their influence in turn not only directs the local agent, 


but permeates a whole community. Society at large is tinctured with their 

l in a suprisiugly short space of time; their influence is also potent at 

[Barters; in matters of importance in the management of agency affairs 

their word Ifl practically law; nor is it alone in the correction of errors that 

the special is noticeable— he can create them. Let me cite an instance, a. 

-pot on the business — " credit." This evil can be easily and effectually 

by special agents, if they so agree. 

I have written to no purpose if I have not demonstrated the importance, I 
will eren say the absolute necessity, of this association; it is to the business. 
as lungs to a body, and I warn you, friends and associates, it is in danger. 
- have rolled around since fir st we met; we have cherished the sen- 
timent of its birth, we have dropped a tear on the grave of those comrades. 
who have left the ranks, and closing up we touch elbows on the march. We 
have rejoiced with those who have been promoted, and have mourned with, 
those who mourn. Thin locks and gray beards show plainer year by year 
and yet, my comrades, we have taken no note of time. Those of us who 
were young ten years ago are ripe and mellow now. We do forget the rising 
generation. We forget the helping hand so much appreciated in our own 
boyhood. Our world is bounded by the roll call of 1875. 

The Monitor of November last contained an article headed, "What ails 
the Northwestern Association?" From this distance I apprehend it is the 
same danger of which I warn you — want of association. This is what is 
gettiug in its killing work. New faces and young blood are pushing the 
ancients from their business stools. The ancients, forgetting the trials of 
fifteen years ago, resent this intrusion of fresh material, forgetting that 
they furnished the very theories and ideas upon which the rising gen- 
erations thrive. The remedy is simple. Be to them as were the great, 
hearted men of your day— Flint, and Hopkins, and Lowe. Invite these 
young men to join your ranks. Encourage them to write, and discuss 
matters of mutual interest. Be to them the mentor and friend. In short, 
now, more than ever, is the time to cultivate each other with renewed pur- 
pose, to devise a plan whereby theory and practice can more nearly join and 
be maintained, by the influence of association. 

In closing, a few words to the local agent. Many of you have advocated a 
union or association of local agents. Since our last meeting, this has been 
done. It is a move in the right direction. The time is not far distant 
when the intelligence of a local agent will direct the affairs of his calling 
into safe and legitimate channels. Discussion, interchange of views and 
stated meetings will have the effect of weeding out the chaff and subduing 
the bombast. The local agent has ever been recognized as a power in the 
land. The influence of association will expand and broaden his power for 
g° od - GEO. F. GRANT. 

The President— It is very satisfactory to know that at least 
one of the members feels the same in regard to country membera 


being received heie, and getting every possible means of educa- 
tion that we can give them, as the present President. It is my 
opinion that the true effort that we should forward is to assist 
all the younger specials and adjusters to become better in- 
formed, and therefore workers, and not permit them to wait and 
become full-fledged specials and adjusters through the same 
means that many of us have had to do. Let us lend them a 
helping hand, and it will certainly be one of the things that 
brings good into the business. 

Mr. J. W. Staples — There having been no action taken on the 
report of Mr. Grant, for the purpose of placing it on file, I will 
now make a motion that all reports that are read be received and 
placed on file, without any special motion to that effect. 

The President — The chair would rule that unless some objec- 
tions are offered, that that would be the proper course, and per- 
haps I was in error in not ordering the paper placed on file. I 
placed my own on file and order that all be placed on file un- 
less there is some objection. I think that will answer all pur- 

The next regular committee that is to report at the meeting,, 
is that of " Forms and Policies." the committee being W. L. 
Chalmers, E. E. Potter and J. M. Thompson. I will call first 
on Mr. Chalmers to give us his ideas about it. 

Mr. Chalmers — Last week Mr. Potter, Mr. Thompson and 
myself had a consultation and agreed to divide up the subject 
as far as we could. My part is rather dry, but I will read it to 


Mr. President and Gentlemen of the Fire Underwriters' Association: — When 
our President appointed the various committees for the present year, he 
expressed a wish that each member of said committee should prepare a 
paper, instead of leaving the work to the Chairman, as has been the practice 

In accordance with that request, as a member of the Committee on Forms 
of Policies, I propose now to say something upon that subject, confining my 
remarks to the clause in our policies relating to appraisements, and the 
forms of agreement for appraisal. 


1 this particular branch of the subject because only a short 
I was interested in a suit brought by a claimant against certain 
sing out of a loss adjusted by me. In that case the plaintiff 
1 to show that the appraisement had been irregular, and there- 
roid, alleging that before going into the appraisement there had been 
no disagreement as to the amount of the loss. (As to that, I may remark, in 
g, the claimant signally failed.) 
During the trial I had the privilege of listening to the law relating to 
appraisements, as presented to the Court by that well-known and very 
able insurance lawyer, T. C. Van Ness, Esq., who appeared for the compan- 
and to whom I am indebted for many of the following suggestions. 
It is well settled law that the companies cannot, by the provisions of their 
policies, compel the insured to submit any question other than one of fact, 
t<> arbitration. Hence, agreements to " submit all matters in dispute, or 
any question of difference that may arise," and similar provisions in pol- 
. have been held to be void, as going to the root of the contract and 
tending to oust the courts of their jurisdiction. And it is doubtful whether 
the usual arbitration clause of the policy can be enforced, unless in the body 
of the policy it is provided that the liability of the company, or its agree- 
ment to pay, shall be subject to the terms and conditions of the policy. The 
language to use in this regard, and which makes the arbitration clause 
operative beyond question, is substantially this — 

And said company promises to make good unto the assured, etc., etc., such loss and 
damage, etc., etc., the amount of such loss and damage to be estimated according to the 
actual cash value, etc., etc., and if not agreed upon between the insured and the com. 
pany to be ascertained and adjusted in accordance with the provisions of this policy, and 
to be paid sixty days after notice and proof as required by the terms of their policy shall, 
et:., etc., and the ascertainment and adjustment of the amount of loss as herein provided, 

Your policy provisions being sufficient to entitle you to an appraisement^ 
or in other words, an arbitration as to the amount of loss, you must be care- 
ful to put yourself in a position to render a suit at law impossible in the ab- 
sence of such arbitration, and, in case such suit be brought, to defeat it upon 
the ground that the policy provision has not been complied with. In this 
connection two things are to be borne in mind. In the first place, an arbitra- 
tion would neither be necessary nor proper unless a disagreement should 
• as to the amount of the loss. It is therefore incumbent upon the ad- 
juster, in case he does not like the appearance of the loss, to create, prompt- 
ly, the necessary difference of opinion. I know a case recently tried in this 
city where the refusal of the company to pay was based wholly upon a belief 
that the insured had less stock than he claimed, and one of the defenses 
the failure of the insured to arbitrate. But the company's record upon 
this point was so defective that the plaintiff was enabled to make it appear 
in evidence that no difference of opinion as to the amount of loss had 
arisen. To create this difference of opinion, then, is the rirst and nect— 
thing to do; to make the record of it so complete that the insured cannot 


•deny it, the next; the most effective manner of preserving the record upon 
this point i& to write a letter to the insured stating squarely that the company 
is of the opinion tbat the loss is not as claimed by the insured, and at the 
-same time demand an arbitration. Have this letter delivered, and the proof 
of such delivery preserved. If these very simple precautions are observed the 
insured must either arbitrate or be beaten in any suit he may elect to insti- 

In these arbitrations great care should be taken to have the property, the 
•damage to which is to be appraised, described with certainty, both in the 
submission and the award, otherwise the whole proceeding may fall to the 

Lastly, if any papers are referred to in the award as constituting a part 
of it, as for instance an itemized statement of materials, this paper should 
be attached to the award— without % this the award would not, properly, be 
receivable in evidence. 

At our annual meeting three years ago, as Chairman of the Committee of 
Forms of Policies, I had the honor to prepare and read a paper on that sub- 
ject. In that paper I c uggested that the task of framing the conditions of 
our policies should be delegated to the most experienced men in the busi- 
ness, aided by a learned and able jurist, so that when, unfortunately, we had 
to go into court, our policy conditions would stick, and not be treated as if 
only "sound and fury signifying nothing." Carrying out my own sugges- 
tion, and for the purposes of this paper, I requested Mr. Van Ness to draw 
^up a legal form of agreement to submit to appraisal. This he kindly did. 
J now submit it as follows: 


"Whereas, the insurance compan hereafter named, to-wit: ha heretofore insured 
on the following described property, and as follows, to-wit : (Describe property cov- 

ered by policy.) 

And whereas, by a fire occurring on the day of 188-, the said property was, it is 
•claimed, (Here insert whether totally or partially destroyed.) 

And whereas, the insured in said polic named and the said compan are unable to 

agree as to the sound cash value of said property at the time of said fire, and the amount 
in money of the damage thereto by reason of said fire, and a difference of opinion in 
that regard has arisen between the said parties : 

Now, therefore, that the sound cash value of the said property at time of said fire, and 
the amount in money of the damage thereto, by reason of said fire, may be fixed, and that 
the amount for which said compan liable by virtue of polic , if at all, shall be deter- 
mined, it is hereby covenanted and agreed by and between said insurance compan 
above named, and the said the insured under said polic , that the sound cash value of 
the property above mentioned, at the time of said fire, as well as the amount of the actual 
loss or damage to said property by reason of said fire shall be determined by three ap- 
praisers to be selected as follows, to-wit : one to be chosen by the insured, one by the 
company, and the two so chosen to select a third to act as umpire as to all matters in which 
they shall disagree, and the said appraisers so chosen as aforesaid shall estimate, appraise 
and determine the true sound cash value of said property at the time of said fire, and 
also the amount of the actual loss or damage to said property by reason of said fire, and 
«, true return and award, under oath, of said value and damage shall by them be made, 
and a copy thereof delivered to each of the respective parties. 


The said estimate and appraisement shall be made in the manner following,, 

The appraisement and award by said appraisers, or any two of them, pursuant to this, 
agreement, shall finally determine between the above named compan and any person or 
persons making claim against the said compan by virtue of the said polic the sound, 
cash value of said property at the time of, and the amount of loss or damage thereto 
by reason of, said fire, and shall conclude both parties as to the amount to be paid under 
said polic if the company shall be liable for any loss thereunder, but shall not determine 
the liability of said compan nor any other question or matter of difference between 
the said parties other than the amount of sound cash value and of loss or damage, and 
it is expressly understood, covenanted and agreed that the submission to appraisal; 
herein provided for, nor said appraisal or award nor any act, matter or thing in connec- 
tion therewith shall not operate as, nor be taken to be, a waiver by the said compan 
nor any of them, of any provision or condition of polic if shall elect to avail 

Id witness whereof the parties above named have hereunto placed their hands this 
day of , 188-. 


State of 1 

County of ) ss * 

We, the undersigned, do each of us solemnly swear that we are not interested, either 
directly or indirectly, as partners, creditors or otherwise, or related to either of the 
parties to the foregoing agreement; that we will act with impartiality and fidelity in mak- 
ing an appraisement and estimate of the actual damage to the property of insured 
by the agreeably to the foregoing appointment, and that we will return to the said 
a true perfect, just and conscientious appraisement and estimate of damage, 
based upon the actual cash value of said property at the time the said damage was caused, 
taking into consideration all manner of depreciation from use or otherwise, according to 
the best of our knowledge, skill and judgment. 

Sworn and subscribed to before me this day of , 18 — . 

Sworn and subscribed to before me this day of , 18—. 





The undersigned appraisers, appointed as above, do hereby, in accordance with said 
agreement for appraisal, and the conditions of the policy referred to therein, select 
as the third party or umpire to act in the matter of appraising, estimating and making 
the award of damages to the property insured under said policy. 
(Umpire to make declaration above before proceeding to act.) 


We, the undersigned, having been mutually chosen by the parties named in the above 
agreement, to appraise the damages to property insured under Policy No. issued to the 
parties of the first part by the declare that we have carefully examined the prop- 

erty shown us, have taken into consideration the age, location and condition of the prop- 
erty at the time of the fire, and after making proper deductions for depreciation and for 


property saved, find that the damage by fire and water to said property, more fully de- 
scribed in schedules attached hereto, amounts to dollars, as follows, viz. : 
On Total Sound Value, $ Damage, $ 

On Total Sound Value, $ Damage, $ 

On Total Sound Value, $ Damage, $ 


Accompanying the above form of submission were the following remarks: 

You will notice that this form is drawn very generally and so as to apply to total or par- 
tial loss on buildings or personal property. As to the manner in which the appraisement 
shall be made, I have left a blank space, which the adjuster can fill up as his experience 
suggests. Two separate forms might be printed; in one, filling up this blank with nec- 
essary provisions as to the manner of appraising buildings, and in the other as to the 
manner of appraising personal property. 

You will notice that I do not in the suggested form make the appraisal "pursuant to 
the terms of the policy," the latter varying so much that it would be impossible to 
get any one form to fit. I think, however, that the form which I send will accommo- 
date itself to almost all the policies now in use. 

The importance of having our appraisement clause and agreement to sub- 
mit in good and legal form so as to make it stick in case of a suit, is my 
apology for having occupied your time in discussing such a dry subject 
as has fallen to my lot on this occasion. Adjusters now present are fully 
alive to the fact that the present forms are very imperfect. I trust, there, 
fore, that some profitable information and instruction can be gleaned from 
my paper and that my crude remarks may prove not to have fallen on barren 

The President— I do not think an apology is necessary for a 
paper of that kind. It is one of the pithy papers; it has meat 
in it that we can utilize. We can draw on that paper no doubt. 
I would now call on Mr. Potter to make his statement in regard 
to policies, but I understand that Mr. Potter is attending a meet- 
ing of his directors. We will pass his paper at the present time 
and call upon Mr. Thompson, 

Mr. Chalmers — I understand, Mr. President, that Mr. Thomp- 
son is in the country. Mr. Secretary, has he sent his paper in ? 

The Secretary — No, sir. 

The President — I know he prepared one, and I will ask the 
Secretary to call upon his Company and see if he left any papers 


We will now listen to his " Co-Insurance Clause/' by Mr. Z. 
P. Clark, our Vice-President. 

Mr. Clark — This paper will be its own apology. I have noth- 
ing to say in its favor, or against it. 


" Co-insurance" — a compound word not found in any dictionary — coined 
by and in use among underwriters for their own information and guidance, 
as is the lingo of the fence for its habitues — not understood by those outside 
the profession of underwriting, and of vague significance to many of those 
in the profession — a word whose meaning and effect would have to be taught 
to the merchant, the banker, the capitalist or the small property owner who 
are to be made to paricipate in its operations, as silence regarding it would 
work serious injury to them. 

11 Clause — a separate portion of a written paper." Combine the two words, 
and we have M co-insurance clause," which can mean nothing, for it cannot 
be proven to be other than a " separate portion " of something unknown to 
our vocabulary, to literature (other than " shop ") or to commerce. 

Had our President used the word "nothing " as the subject for treatment, 
at my hands, he would have avoided the perpetration of a ghastly joke, and 
you been spared the infliction of this paper. 

Should I attempt to deal with a certain stipulation at one time considered 
by our local underwriters as good for introduction into our contracts, and 
called the " Co-insurance Clause," I should fail of anything but a re-hash of 
what has been written and said by men eminent in the profession — should 
be forced to crib like Sam Hill, from their erudite papers. 

The various forms of stipulation are familiar to you all. The form which, 
received the favorable consideration of our " Union " was in words about as. 
follows, to wit: 

"It is a part of the consideration of this policy, and the basis upon which the rate of 
premium is fixed, that the assured shall maintain insurance on the property hereby in- 
sured by this policy to the extent of four-fifths of the actual cash value thereof, and fail- 
ing so to do, the assured shall be a co-insurer to the extent of such deficit, and in that 
event shall bear his, her, or their proportion of any loss." 

Does, not this seem clear and definite to you? Is not the intent of its 
framers written in every sentence of it? What other construction could you 
place upon it other than that it requires the assured, who has a stock of 
goods worth $100,000, to insure the same for $80,000, failiug in which to the 
extent of say, $30,000, he becomes a co-insurer with the companies in the 
proportion of 3 to 8, or stands three-eighths of any loss occurring to the 
property insured. 

Now, see the construction placed upon the " clause " by a Michigan Court 
for which I am indebted to the Coast Review. The insurance is $50,000; 


four- fifths of the value of the property is $80,000, and the loss is $10,000. 
Under the preceding interpretation of the clause the comp tnies would pay 
five-eighths of the loss, or $6,250, and the assured would pay three-eighths 
of the loss, or $3,750. Now, hear what the Court says. The question was 
on the meaning of the words, " Co-insurer to the extent of such deficit, " and 
on which the firm brought suit. 

The Court held the clause to be " ambiguous, uncertain and misleading,, 
and liable to a double construction;" and as the law holds the maker of a 
contract liable for all failures to make it clear and explicit, he further held 
the assured and the companies to be co-insurers to the extent of the deficit 
only, and not on the whole loss; and that the loss chargeable to the deficit 
must be borne j intly by the parties to the contract. This would make the 
insurance companies in the case in point pay their five-eighths of the loss, 
or $6,250, and also one-half of the loss chargeable to. the deficit ($3,750), or 
$1,875 more, leaving the assured to shoulder $1,875 as their portion of the 

I doubt if this ruling will be final. I quote it merely to show how little 
ive, who make and utter the contract, know of its force, and from induction, 
how imperfectly the public could ever be made to understand it. 

It is my conviction that a stipulation in any guise which compels the as- 
sured to enter the business of underwriting — willy-nilly would in this far 
western world render the existence of the poor adjuster a drag and a burden^ 
and bring many of your sweet young lives to early and unmerited graves. 
We should have to change the name of this association to " The Association 
for Furnishing Victims to the Co-insurance Clause." 

I venture the assertion that before such a clause could be made popular, 
underwriters would be forced to establish schools of instruction, where the 
public might come and learn why they should, under certain circumstances, 
receive but a fraction of the protection they were paying for; and further, 
that our lives are all too short to accomplish their matriculation. 

The average Pacific Sloper might come to school once, but it is doubtful if, 
after his lessons were over, the exercises would not end in prayer — from 
the instructor for mercy ! 

Neither pupil nor tutor would ever haunt those halls of learning again. 
Others in gloomy succession would file out into the dark night of forgetful- 
ness, branded by the words "failure" and "despair," until underwriters- 
would, with gladness brightening every feature, come back to the time-hon- 
ored forms — "the honest policy for the honest premium" — now in existence. 
Instead of adding to the "conditions" of policies (never read until after a fire) 
eliminate from them every clause that can, consistently with a possible ras- 
cality, be spared. This is the policy of the period. 

The motive for the proposed effort to establish in this city a condition 
which has been tried and abandoned in numerous insurance centers, by 
others of wider range of experience than ours, is found in the pocket. (I take 
it for granted that the movement did not originate in any sentiment of sym- 


pathy for the assured.) I cannot understand that any exigency has arisen 
demanding po radical a change in the methods of our profession here, as this 
proposed clause would work. Should such appear, as in the cases of the 
great Chicago and Boston conflagrations, our underwriters will meet it as 
did tbe Napoleons of those dark days, by organization and advancement to 
adequate rates. 

No doubt under -insurance is as great an evil as over-insurance. Have we 
the remedy in the co-insurance clause? Is it not easier for the dishonestly 
disposed to whittle down values to meet the requirements of the clause, than 
for him to inflate them to meet excessive insurance? In this light, as over- 
insurance is counted as affecting the moral hazard of a risk, would not 
under-insurance in connection with the co-insurance clause, become also an 
important factor in its measurements? With all the vantage on the side of 
the claimant, would it be possible to graduate ratings to satisfactorily fit the 
different percentages of coverings. Would you not be reducing your premi- 
um account without a corresponding reduction in your liability? 

No doubt 75 per cent, of values is a better line for the underwriters in 
•cases of partial loss than 50 per cent., but no individual company is compelled 
to write, except upon such terms as suit it. Many are hungry and would 
gulp down a risk at 10 per cent, of values and holler for more! 

If the assured is willing to assume the risk of a loss in excess of his insur- 
ance, which may more than equal the liability of his companies, should not 
the mutuality of interest end there? 

If our experience in this limited field has taught us how to estimate haz- 
ards, and our ratings are based upon that experience, and we have made and 
are making money from them, without the co-insurance clause, has not the 
public paid for, and will it not gladly continue to pay for all the hazards 
assumed by the underwriter, trader-insurance as well as over-insurance? 
Will they not willingly contribute to pay for all these hazards rather than 
submit to the uncertain workings of the co-insurance clause? How would it 
work in cases of general and specific policies? (Non-concurrent policies will 
continue to exist in spite of compacts and legislation to the contrary, just 
so long as two companies, two agents or two brokers live to lash the circum- 
ambient air with their competing tongues.) 

If the percentage of total insurance to total values is 50, and the loss is on 
a subject specifically insured, to which the general policy also applies, and 
both combined amount to more than the value of the article on which the 
loss is claimed, what portion of the loss would the assured bear under the 
four-fifths co-insurance clause? Would not the adoption of the clause neces- 
sitate a modification of all the conditions of our policies relating to con- 
tribution of general to specific policies? Might not other complications 
grow out of the proposition? 

Probably the greatest endorser known to the business world is the insur- 
ance company. More loans are guaranteed, more payments for merchan- 
dise are assured, by the insurance company than by any other one endorser. 


The banker or the merchant would hesitate to accept an endorsement which 
by its terms would make the amount recoverable under it problematical. It 
is our boast that the insurance policy has grown to be a commercial necessity, 
that no well directed business is conducted outside its protecting aegis. 
Why seek to destroy its usefulness now by making its value a matter of 
speculation to both the assured and the guaranteed. 

To make the co-insurance clause a success, unanimity of form and action 
must be faithfully maintained among all the companies in our field. 

Are not our present obligations to each other greater in number than we 
can always remember? 

Can any one predict the longevity of the present compact? 

Should the compact die would the so-called co-insurance clause live? 

Should we do things simply because we can? Z. P. CLARK. 

The President — The suggestions that are offered in the closing 
remarks of our Vice-President's paper are certainly enough to 
furnish us matters for thought and discussion for the next twelve 
months. That is the way to bring those things before us, and I 
am of the opinion, too, that it might be well to pursue the same 
plan as we have for the year or two past to ask for ideas from 
those present regarding the papers as they are read. While the 
paper of Mr. Grant was being read I saw the faces of some of 
our members light up as though they were desirous of saying 
something, and if so, now is the time. If not now, they might 
think over it during the intermission. We are going to have a 
meeting this afternoon and to-morrow. There is a little time yet 
to listen to another paper, if so desired; it is only 12 o'clock. 
We will not unpack the Knapsack until this afternoon. 

Mr. Dornin — While the paper of Mr. Chalmers is yet fresh in 
our minds, I would like to move that the adjustment form in 
blank, as prepared by Mr. Van Ness, be adopted by this Associ- 
ation, and that the Executive Committee be instructed to have 
several forms printed and supplied to the members of the Asso- 
ciation at cost, and that hereafter it be used in all matters of ad- 
justment and appraisement. It seems to me that it fills a long 
felt want. 

The President— You have heard the motion of Mr. Dornin; is 
that motion seconded ? 

J. W. Staples seconded the motion. 


The President — The motion is, as I understand it, that this be 
adopted as the sense of the Association, as being the proper form 
to use. Mr. Dornin did not propose it in exactly those words, 
but as the various policies are different in their conditions, and 
as the adjusters might not all see fit to adopt it, it is not like a 
matter that comes up as a difference between companies. This 
is not, as I understand it, a difference between companies that 
this Association might properly consider, but it is a difference 
that might possibly arise between a claimant and a particular 
company. I would suggest that this motion be amended, so 
that slips be printed and furnished to the members, and let the 
matter be discussed, perhaps to-morrow, or at another meeting. 
It is simply a suggestion of mine, so that we can all think over 
the matter carefully and more fully. Mr. Van Ness has given 
this matter a great deal of thought, and so has Mr. Chalmers, 
but still we all have had some experience, and have some ideas 
as to the change. 

Mr. Dornin — I will adopt the President's suggestion. It has 
been suggested that the form be modified by the committee in 
consultation with the attorney. 

The President — When would it be your idea to have the mat- 
ter come up — to-morrow or at the next monthly meeting ? 

Mr. Dornin — The next monthly meeting is time enough. 

The President — It will be understood that the Secretary have 
slips prepared giving the proposed clause, reported by Mr. 
Chalmers, and furnish to each of the members, and that this 
matter come up at the next monthly meeting, when we will take 
official action. The suggestion made having been adopted by 
Mr. Dornin, that will be considered the motion. Any other 
remarks? Those in favor of the motion, say aye; contrary, no. 

I desire to state that Mr. W. J. Broderick of Los An- 
geles, one of our honorary members, has sent two boxes of 
" Navel oranges" to the Underwriters' Association of the Pacific. 
He regretted the fact that he could not be present, and sent the 
oranges. He thought it would be better, instead of having them 


at the dinner this evening — as we probably would have plenty of 
good things then — that they be brought into the room while we 
are in session and be at your disposal. That will be another 
reason for you to come this afternoon. The oranges and the 
Knapsack together will furnish a large amount of commissary 

Mr. Farnfield — I would suggest, Mr. President, that to-mor- 
row morning the oranges would perhaps be better for the mem- 
bers than this afternoon. 

The President — I want every member to bear in mind that 
this meeting comes but once a year, and come here promptly at 
the hour to which we shall adjourn — and bring some other 
member with you. We have not one-third of our members here 
now; there are many more in town that ought to be here. 
Come and bring some one with you. It adds to the interest, 
both your own and those who have taken the time to prepare 
papers, to have a large company here. 

The meeting was then adjourned until 2 o'clock p. m. 

Afternoon Session. 

The President — The meeting will come to order. 

Mr. Chalmers — I would like to introduce a gentleman who 
comes from a place where they have more death than life, Mr., 
Piatt, of Tombstone, Arizona. 

The President — I will state that Mr. Thompson, one of the 
Committee on " Forms and Policies," is unable to be present, 
but he has performed his duty, and has written a paper, and I 
have asked Mr. Louis Mel to read the report for Mr. Thompson. 


To the Fire Underwriters 1 Association of the Pacific: — This subject has been 
so fully and ably written up by members of former committees of this Asso- 
ciation, that I fear my efforts to do justice to its importance will fall far 
short of affording you the usual highly interesting paper on this theme. 


I feel assured, however, that as my two fellow contributors and members 
on this committee have, in the past, presented so many valuable features of 
this question for j r our consideration, equally interesting papers will be, or 
have been, presented by them on the present occasion, thereby making 
amends for any deficiency on my part in contributing a paper worthy of your 

I will first devote my attention to the printed form and conditions of the 
fire policies now generally in use. 

It is well settled law that it is competent for insurers to impose any condi- 
tions in their contracts which are not ag tinst law or public policy, and it 
may therefore be reasonably anticipated that the printed forms of policies 
now in use will undergo many changes to suit the established customs, 
usages and localities in which they are issued, and also to conform to the 
decisions of the Courts and the necessities of trade. 

As but few suggestions have hitherto been made before this Association on 
the printed form of policy, I may with becoming modesty suggest what I 
conceive to be desirable in the way of improvement in the form, and also in 
the conditions apparently best adapted to current usage. 

The size of the sheet upon which the average policy is printed may, with 
some advantage from an economic as well as a business standpoint, be limited 
to less than the size of this sheet of foolscap. * 

The best efforts of the lithographer's skill may still be developed in artistic 
flourishes in bringing out the name of the company, but as many instances 
might be cited where the name of the company is made of secondary import- 
ance, by being surmounted or surrounded by a scroll in which the chief 
central figure is either a mythical, historical, allegorical, natural or architect- 
ural emblem of the company, it has occurred to me that the name of the 
company might with advantage appear in direct connection with the indem- 
nifying clauses of the contract, in its preamble, in connection with the name 
of the assured, as the parties to the contract. 

The schoolmaster is abroad, and while he has been said to have remarked 
— speaking of the world — that " It do move!" it might not be amiss to keep 
np in this respect, and instead of in another way following in the footsteps 
of this worthy dominie — by adopting his peculiar idiom — make use of the 
words, " does insure " in new issues of policies. 

Following the name of the assured, the use of the words, "hereinafter 
-called the assured," will more clearly indicate to whom this term, so fre- 
quently afterwards occurring, refers. 

The consideration should disclose the fact that the representations, agree- 
ments and warranties of the assured and the conditions therein expressed, as 
well as the premium in " dollars and cents " to it paid or to be paid, are the 
essence of the contract on his part. 

The fact of the policy having been issued and delivered to the assured, 
establishes the fact, in accordance with the general ruling of the Courts, that 
-if not paid in cash, credit was given for payment of premium, and the condi- 


tion that no liability shall attach until the actual payment of the premium is. 
therefore waived, and the company precluded from setting up the fact of non- 
payment of the premium as a valid defense to an action for recovery of loss 
under the policy so issued. 

4 * Against all such immediate loss or damage sustained by the assured, as 
may occur by fire to the property above specified, but not exceeding in 
amount the sum insured, nor the interest of the assured in the property, 
and except as hereinafter provided, for the term of from the day of 
at 12 o'clock, noon, to the day of at 12 o'clock, noon," etc., etc.— the 

day and year to be written in words, not figures — is the form recommending 
itself for the most universal adoption as an indemnity clause. 

Having now disposed of the "ten words" guaranteeing indemnity to the 
assured on the part of the company, we now come to the " hundred and ten ,y 
taking them all bach. 

The arrangement of the printed conditions is of much importance, and but 
comparatively few companies have adopted the most desirable form. 

Instead of printing the conditions in one line from one side of the sheet 
to the other, a better arrangement is to subdivide into three columns, and 
let each subject heading or classification of conditions be indicated by bold- 
faced type, the more easily to refer to such conditions as may be desired. 

It has occurred, that where policies are printed all across the sheet, a line 
pointing out the consequences of some sin of omission or commission on the 
part of the assured, has been skipped by him in reading his policy; with the 
aid of the time-honored magnifying glass, called into requisition and forensic 
existence by the eminent jurists and legal luminaries who have been wont to 
hold up the policy before the eyes of the jury and exhibit the fine print, the 
many printed, hektographed and written slips and endorsements in all 
shades of blue, black and red, until the optical illusion was complete, and 
then had no difficulty in convincing the jury that it was the manifest inten- 
tion of the company to impose upon the assured by endeavoring to hide 
their conditions in the finest and smallest of small type print; and then point 
out the inconsistencies and contradictions in the printed slips referred to, 
until the necessary degree of bewilderment was attained to rely on a verdict 
"agin the company." 

The type may be sufficiently large and well leaded to permit reading the 
policy as easily as a newspaper, and by a simple, concise and sensible word- 
ing of the conditions, they may be so arranged, printed and construed as to 
render the form shorter, neater and clearer to the average mind, and the now 
too prevalent clumsy verbiage and tautology no longer necessary. 

Having outlined the form of policy, I submit herewith a copy of the form 
and conditions, which will be found to possess the essential elements neces- 
sary to the protection of the company and the assured, it is to be hoped. I 
do not suppose for a moment that either the form or the conditions will be 
adopted as the "standard form of policy," by either the companies or the 
State; but since I am under the obligation to give my views on the subject, 


before this Association, I shall not exact any "royalty" should either adopt 

It has frequently occurred to me that something should be done toward 
reconciling the various forms of policies to each other in several particulars 
in which they now present unpleasant advantages and disadvantages, by com- 
parison. We will take the subject of insurance on wall decorations, fresco- 
ing and plate glass, for example. Some companies issue policies covering on 
these subjects under same amount with building, while the majority of com- 
panies do not cover them unless specifically insured. 

Then again, some companies' policies covering on brick building having 
fire proof roof, with roof of shingles or shakes over, if amount insured should 
not be exhausted on building, incase of loss would also cover on shake or 
shingle roof, if not excepted under a clause requiring specific insurance there- 
on, as in the policies of some others; and this, notwithstanding the fact that 
ten per cent, is the rate on shake roof, and say one and a half per cent, on 

Again, in the case of kerosene oil, some companies make no provision as 
to legal standard or flash test of oil to be used on the insured premises for 
lights; make no restriction for gasoline gas for lighting, or the distance car- 
bureter shall be located from the building; while others particularly specify 
restrictions in each case. 

To some interested persons policies granting the privilege for thirty days 
builders' risk, free of charge, and without notice, would be preferable to 
those granting but fifteen days; and these again would be preferred to those 
granting but rive days; or in some few instauces, none at all. 

That these differences in printed forms of policies might be harmonized so 
that all companies would compete for business on equal terms in this respect 
at least, is not beyond the bounds of possibility, but of probability —perhaps! 

The written form of policy is the most frequent source of annoyance to 
the underwriter, and many are the instances in which the companies are 
involved in losses much beyond what they had contemplated as pos.-ible, by 
careless wording of the written policy form. 

The loss on " the Dolman," which was insured under the item of " wear- 
ing apparel," in a policy of insurance covering on the contents of a dwelling 
house, and described as contained therein, which " Dolman " was afterwards 
taken to a furrier's store for repairs, or storage during summer season, and a 
fire occurring in the store, th6 "Dolman " was burned. The company refus- 
ing to pay the loss, suit was instituted, and judgment obtained against the 
company. This might have been avoided if the words "while contained in 
the dwelling and not elsewhere," had been inserted in the policy. 

The lady whose " diamond ring" rolled off the mantel into the grate and 
was consumed by fire, was not so successful in entering suit against the 
company insuring her " wearing apparel," as the Court held the company not 


The inference is obvious: investments in ladies' sealskin sacques or "Dol- 
cmaus " give more general satisfaction, and yLld better returns " under tire," 
if insured, than diamonds. 

The use of the term ''detached," to designate the fact that a building, if 
of brick, is situate forty feet distant from any other building, or if of wood, 
one hundred feet from an exposure, is meaningless and incapable of any 
other construction than that the building so described is separated from any 
other building or buildings. The customs of underwriters vary in different 
parts of the conntry as to the intervening space between the risk and other 
buildings, to describe and rate the same as being " detached;" hence custom 
does not define or establish a conventional rule, and therefore, to render this 
description of a building intelligible, the distance intervening between it and 
other buildings should be stated. 

The use of the words " sold but not' delivered," in what is generally known 
as the commission clause, does not give the assured the indemnity sought, 
it being well established in law that the transfer of the title to property in 
the thing sold is so far as necessary an immediate consequence of a com- 
pleted sale and essential thereto, that where it cannot, or by agreement does 
not then take place, there is only an executory sale and not an actual change 
of ownership, and while the sale is executory and incomplete, the vendor's 
insurance continues to attach so long as change of ownership or actual title 
has not passed, even though the purchaser may be legally bound to pay the 
vendor the purchase money. Therefore, for ample protection to the vendor 
and his immediate purchaser, the phrase used in the policy should be " sold 
and not removed." 

Where executors, administrators and trustees, bailees and other parties 
acting in a fiduciary capacity, having possession and control of property, 
where title is vested in the heirs or other beneficiaries under a will, desire to 
insure it, the policy should be written in the name of " the heirs," and not 
in the name of " the estate of," the latter being held to be ambiguous accord- 
ing to the rulings of the courts generally. 

Policies on lithographing establishments have been issued covering on 
"lithographing stones and work thereon," under one amount. Apart from 
the question of the advisability of covering these two items under one 
amount, is the fact that the item of "work finished and unfinished " is one on 
which a very heavy loss may occur if the stones be subjected to even a low 
degree of heat, which would cause them to crack when placed in the press, 
and their extreme liability to suffer from water has been well demonstrated 
by the loss of a considerable amount on this item, resulting from water in 
the case of Waldstein's establishment. 

The item referred to has beon very cautiously written, if at all, by the 
most experienced underwriters, and as the value of the work on lithographic 
stones vary from $10 to $250, whereas the value of the stone is nominal, 
companies writing on the item can hardly escape total losses. It would ap- 
pear desirable that this item should be specially rated in order to afford any 
prospect of writing it at a profit. 


The prevalent custom of issuing policies granting permission for " other 
concurrent insurance," I regard as one of the worst features introduced into 
our Coast business; this permit being so general that in nearly all cases com- 
ing under my observation, it is granted indiscriminately on all "mercantile 
stocks," whether in city or country— corner groceries and peanut stands 
not excepted — without reference to value of stock insured, and voluntarily 
on the part of the company or their agents. 

This permit has hitherto been looked upon as one of the safeguards of the 
business of fire insurance, and when over-insurance was sought by obtaining 
a permit for an amount largely exceeding the value of the stock insured, the 
companies desiring to protect themselves against the evils of over-insurance 
could do so; and on the other hand could decline to carry the risk if the ra- 
tio of insurance to value was too low, and the ratio thereby rendered inad- 

The Executive Committee of the Pacific Insurance Union will doubtless 
endeavor to enforce the rule that the amount of other insurance permitted, 
must appear in the policy (excepting only storage and grain warehouse poli- 
cies), such a rule having been in force since the establishment of the " West- 
ern Union," and giving general satisfaction. 

It is not contended that the amount of insurance permitted would correctly 
represent the amount of insurance carried at all time?, but it would at least 
be an improvement on the present custom. 

The subdivisions of the ordinary contents of a dwelling house into the 
item of " household furniture, useful, ornamental and family stores " — "fam- 
ily wearing apparel" — "Printed Books, Oil Paintings, Pictures and other 
works of art," and insuring separate amounts on each item, while an excel- 
lent thing in some respects, is not calculated to heighten the feeling that in- 
surance companies are more consistent in their methods of business than 
they are credited with being. 

The present form in use here does not meet with popular approval and 
cannot be deemed a consistent measure to adopt in consideration of the fact 
that policies covering on a merchant's stock of " general merchandise," con- 
sisting usually of dry goods, fancy goods, boots and shoes, groceries, crock- 
ery, glassware, and such other merchandise as may be contained in his store, 
is not subdivided in his policy, and so much written on each item of his 
stock, although he may have in stock some unusual and highly priced goods 
or articles of virtu. Then why should not the contents of his dwelling be 
similarly insured under one sum ? 

I can remember when policies covering on " stock in trade " were so segre- 
gated that each class of goods were insured under a separate amount — and 
not so long ago, either; but this being a progressive age, the present form of 
policy covering on everything in stock under one amount has been adopted 
and meets the popular demand. 

I don't submit the question with any desire to modify the existing custom, 
but simply want to know, you know. 


The popular dwelling house form as it is called, above referred to, is in 
use all over the Eastern States, and was adopted by the Western Union since 
1882. In fact, many £of the policies issued on this Coast would be con- 
verted into the " popular form " should the policy clerk omit to insert the 
word "Nothing" before such items in the dwelling house printed form of 
policy, as were not intended to be insured and a loss occur, according to the 
decisions on this point. 

In conclusion, the next progressive step towards a better understanding of 
the rights and privileges of the parties to a contract of insurance, will be 
made when the assured signs the contract after issue by the company, or 
signs a duplicate copy, which may be retained by the company or agent, 
while he retains the one issued by the company or agent, thus completing a 
contract in which the understanding with the agent on the part of the com- 
pany is merged in writing, as in the case of other contracts. 

Regretting that I cannot be with you to enjoy your annual "feast of rea- 
son and flow of soul," I remain, yours, J. M. THOMPSON. 

By this Policy of Insurance 

Fire Insurance Company, 

In consideration of the representations, agreements and warranties of 
assured, and of Dollars 

To it to be paid by the Assured hereinafter named, does Insure 

Against all such immediate loss or damage sustained by the assured, as 
may occur by fire to the property above specified, but not exceeding the in- 
terest of the assured in the property, and except as hereinafter provided, for 
the term of from the day of eighteen hundred and at 

12 o'clock noon, to the day of eighteen hundred and at 12 

•o'clock noon, the amount of loss or damage to be estimated according to the 
actual cash value of the property at the time of the fire, which loss or dam- 
age shall in no case exceed what it would then cost to repair or replace the 
same, deducting therefrom a suitable amount for any depreciation of 
such property from use or otherwise; and to be paid to the assured or 
legal representatives, in U. S. gold coin, as hereinafter provided; subject to 
the following terms and conditions: 

1. Warranty of the Assured. 

The assured, by the acceptance of ihis policy hereby warrants that any application, 
survey, plan, statement or description connected with procuring this insurance, or con- 
tained in, or referred to in this policy, is true, and shall be a pirt of this policy; that the 
assured has not overvalued the property herein described, nor omitted to state to this 
•Company any information material to the risk; and this Company shall not be bound 
under this policy by any act of, or statement made to, or by, any agent or other person, 
which is not contained in this policy or in any written paper above mentioned. 

It is also a part of this warranty that if this policy shall be continued by renewal it 
shall be considered as continued under the original representations; and that any change 
in the risk, not made known to this Company at the time it is so continued, shall render 
this policy void. 



This Policy shall become void, unless consent in writing is endorsed by the* 
Company hereon, in each of the following instances, viz: — 

1. If the assured is not the sole and unconditional owner of the property; or if any 
building intended to be insured stand on ground not owned in fee simple by the assured; 
or if the interest of the insured in the property, whether as owner, trustee, consignee, 
factor, agent, mortgagee, lessee or otherwise, is not truly stated in this policy; or if any 
change take plice in the title, interest, location or possession of the property (except in 
case of succession by reason of the death of the assured) , whether by sale, transfer or 
conveyance, in whole or in part, or by legal process or judicial decree, or the title or 
possession be now or hereafter become involved in litigation, or if this policy be assign- 
ed or transferred before a loss or upon the passing or entry of a decree of foreclosure, or 
upon a sale under a deed of trust, or levy under an execution, or if the assured shall be 
adjudged a bankrupt, or if the property insured be assigned under any bankrupt or in- 
solvent laws. 

2. If the assured have or shall hereafter obtain any other policy or agreement for in- 
surance, whether valid or not, on the property above mentioned, or any part thereof. 

3. If the risk be increased by any change in the occupation of the building or prem- 
ises herein described, or by the erection or occupation of adjacent buildings; or by any 
means whatever within the knowledge of the assured. 

4. If any building herein described be or become vacant or unoccupied for the pur- 
poses indicated in this contract, or the property be used or occupied for any illegal, 

5. If the property herein described, being a manufacturing establishment, shall be 
run at night or overtime, or shall cease to be operated. 

6. Or if any of the following named articles be kept, stored or used in or on the prem- 
ises herein described, any custom or usage of trade or manufacture to the contrary not- 
withstanding, viz.: Benzine, benzole, benzine varnish, burning fluid, chemical oils, re- 
works, gasoline, gunpowder, naphtha, nitro-glycerine, nitrate of soda, oily waste, petro- 
leum and products, phosphorus, rubber cement, saltpetre, spirit gas, or any article sub- 
ject to legal restriction. 

2. Risks not covered by this Policy. 

This Company shall not be held liable under this policy for loss or damage 
by fire in any of the following instances, viz.: 

1. If caused directly or indirectly by means or in consequence of any invasion, insur- 
rection, riot, civil war or commotion, or military power, or by order of any civil or mil- 
itary authority, or in consequence of any neglect or violation of any law or ordinance, 
or by the fraudulent act or procurement of the assured. 

2. If caused by lightning or explosion of any kind, unless fire ensues, and then for 
loss by fire only. 

3. If the building herein described or any part thereof fall, except the fall is the re- 
sult of fire. 

4. If caused by neglect of the assured to use all practicable means to save and protect 
the property at and after the fire, or when the property is endangered by a fire in neigh- 
boring premises, or while away from the location described herein. 

5. For loss of accounts, bills, notes, deeds, manuscripts, evidences of debt or securi- 
ties of property of any kind; or for loss by theft at or after the fire. 

6. For any consequential or constructive loss or damage beyond the actual damage by 
fire to the property, whether such loss or damage be occasioned by any ordinance or law 
regulating the construction or repair of buildings or otherwise. 

7. For loss or damage caused by the removal of property, unless proved necessary to 
preserve the, in which case the Company shall be liable only for the proportion 
that the sum heieby insured bears to the whole value of the property insured, and there 
can be no abandonment of the property insured to this Company. 

1. Description of property not covered by this Policy, except when specifically mentioned. This 
insurance does not apply to, or cover goods held on storage, money, bullion, notes, ac- 
counts, deeds, evidences of debt or securities of property of any kind, jewels, plate, 
watches, musical or scientific instruments (piano fortes in dwellings excepted), orna- 
ments, models, patterns, printed music, books, engravings, paintings, picture frames, 
pictures, sculpture, casts, medals or curiosities, opium, fences, privies, out buildings, 
store furniture and fixtures, awnings, sidewalks, plate-glass doors and windows (when 
the plites are of the dimensions of nine square feet or more), frescoed work, ornamental 
painting or gilding on the walls or ceilings, merchandise in show windows, or wooden 
roofs over fire-proof roofs. 
4. General Privileges. 

1. Kerosene or Refined Petroleum Oil of the legal standard may be used for lights 
only, lamps to be filled and trimmed by daylight and not within ten feet of artificial 


2. Mechanics are allowed to make ordinary alterations and repairs to buildings not 
exceeding fifteen days in each year of this insurance, without notice to the Company. 
Any extension of this privilege must be previously consented to in writing on this 

5. Relative to Issue and Cancellation of Policy. 

1. If any broker or other person than the assured, except a duly commissioned agent 
of this Company, have procured this Policy, or any renewal thereof, or any endorsement 
thereon, he shall be deemed to. be the agent of the assured, and not of this Company, 
in any transaction relating to the insurance. 

2. This insurance may be terminated at any time by request of the assured, or by the 
Company on giving notice to that effect to the assured or the legal holder of this Policy. 
On surrender of the policy, the Company shall refund any premium that may have been 
been paid, reserving the usual short rates in the first case, and pro rata rates in the 
other case. 

6. Proceedings in case of Loss. 

1. When a fire has occurred injuring the property herein described, the assured shall 
use all practicable means to save and protect the same, and shall give immediate notice 
of the loss in writing to this Company. When personal property is damaged, the as- 
sured shall forthwith cause it to be put in order, assorting and arranging the various ar- 
ticles according to their kinds, separating the damaged from the undamaged, and shall 
cause an inventory of the whole thereof, including property claimed to be totally de- 
stroyed, to be made and furnished to this Company, naming the quantity, quality and 
cost of each article. If the loss sustained be upon a building, fixtures or machinery, 
the assured shall, if required, furnish duly verified plans and specifications of such 
property destroyed or damaged. The assured shall, whenever and as often as called 
upon, exhibit to any person or persons named by this Company, all that remains of the 
said property, damaged or not damaged, for examination. 

2. The amount of sound value and of damage to the property, either totally or par- 
tially destroyed, may be determined by mutual agreement between the adjusting agent 
of the Company and the assured; or failing to agree, the same shall then, at the written 
request of either party, be ascertained by an appraisal of each article of personal proper- 
ty, or by an estimate in detail of a building, by competent and impartial appraisers, one 
to be selected by each party, and the two so chosen shall first select an umpire to act 
with them in case of their disagreement; and if the said appraisers fail to agree, they 
shall refer the differences to such umpire; and the award of any two, in writing, under 
oath, shall be binding and conclusive as to the amount of sound value of such loss or 
damage, but shall not decide as to the validity of the contract or any other question ex- 
cept the amount of the sound value of such loss or damage. Each party shall pay their 
own appraiser and one-half the umpire's fee. It shall be optional with this Company to 
take the whole or any part of the articles at their appraised value; and also to repair, re- 
build or replice the property lost or damaged with other of like kind and qualiiy, within 
a reasonable time, giving notice of their intention so to do within thirty days after com- 
pletion of the proofs herein required. 

The making of the loss proofs herein required, and all transactions pertaining thereto, 
shall be by and with the assured, whether the loss is made payable to a third party 
or not. 

And should this Company so elect, it shall, after a fire, be entitled to the undisturbed 
possession of all personal property covered by any of its policies and sustaining loss or 
damage by fire, until such loss or damage shall have been fully adjusted. 

The use of general terms, or anything less than a distinct, specific agreement, clearly 
expressed and indorsed on this Policy, shall not be construed as a waiver of any printed 
or written condition or restriction therein. 

3. A particular statement of the loss shall be rendered to this Company, at its office 
in as soon after the fire as possible, signed and sworn to by the assured, stating such 
knowledge or information as the assured has been able to obtain as to the time, origin 
and circumstances of the fire; also stating the exact nature of the title and interest of the 
assured and of all others in the property herein described, all incumbrances thereon and 
the cash value thereof, the amount of loss or damage, all other insurance, whether valid 
or not, covering any of said property, and a copy of the written parts of all policies: any 
changes in the title, use, occupation, location, possession or exposures of said property 
that may have occurred since The issuing of the policy; h >w, by whom and for what pur- 
pose, the building herein described and the several parts thereof were occupied at the 
time of fire: and shall, if required, furnish a certificate under the hand and seal of the 
Chief of the Fire Department or other officer having charge of the investigation of fires 
(if said property is situate within the jurisdiction of any such officer, and if not, then 
under the hand and seal of a magistrate nearest to the place of the fire, not concerned in the 
loss as a creditor or otherwise, nor related to the assured), stating that he has examined 
the circumstances attending the loss, knows the character and circumstances of the as- 
sured, and verily belie es that the assured has honestly sustained loss on the property 
herein described to the amount which such officer shall certify. 


4. The assured shall, whenever required, submit to an examination or examinations 
under oath by any person appointed by this Company, and subscribe to such examina- 
tions when reduced to writing; and shall also, as often as required, produce their books 
of account and other vouchers, and exhibit the same for examination, either at the office 
of this Company or such other place as may be named by it's agent, and permit extracts 
and copies thereof to be made; the assured shall also furnish certified copies of all bills 
and invoices of the property, the originals of which cannot be produced, and also, if re- 
quired, produce his, her or their servants or agents for examination, under oath touch- 
ing the same. 

5. Any fraud, or attempt at fraud, or any misrepresentation in any statement touching 
the loss, or any false swearing on the part of the assured or his agent, in any examination 
or in the proofs of loss or otherwise, shall cause a forfeiture of all claim on this Compa- 
ny under this policy; and in such case, this Company shall have the right at any time to 
require the same to be delivered up to be cancelled. 

6. This Company shall not be liable for a greater proportion of any loss sustained by 
the assured upon any property described in this policy than the sum hereby insured, 
thereon bears to the whole sum insured thereon, whether such other insurance be by 
policies specific or otherwise, or whether prior or subsequent to this insurance, or 
whether such other insurance be valid or not, and without reference to the solvency of 
other insuring companies. In the event of partially non-concurrent insurance, then to 
determine the liability of this Company, it shall be assumed that policies other than 
specific shall contribute with specific policies in the proportion that the loss on the 
property included in each item of the specific policies bears to the total loss for which 
the more general policies are liable. The adjusted claim under this policy shall be due 
and payable sixty days after the full completion by the assured of all the requirements 
lierein contained. 

7. Re-insurance, in case of loss, shall be settled in proportion as the sum re-insured 
shall bear to the whole sum specified in the contract or contracts of the re-insured 

8. When this Company shall claim that the fire was caused by an act or omission of 
any person, town or corporation, which created a cause of action, the party to whom the 
loss is payable under this policy, shall, on receiving payment, assign to this Company 
such cause of action, and give a power of attorney to sue therefor. 

9. It is hereby expressly provided that no suit or action against this Company for the 
recovery of any claim by virtue of this policy shall be sustainable in any Court of Law 
or Equity, until after full compliance by the assured with all the foregoing requirements; 
nor unless such suit or action shall be commenced within twelve months next after the 
fire shall have occurred; and should any suit or action be commenced against this Com- 
pany after the expiration of the aforesaid twelve months, the lapse of time shall be taken 
and deemed as conclusive evidence against the validity of such claim. 

Vni. AND IT IS HEREBY UNDERSTOOD AND AGREED by and between this Company 
and the assured, that this Policy is made and accepted in reference to the foregoing terms 
and conditions, which are hereby declared to be a part of this contract, and are to be 
used and resorted to in order to determine the rights and obligations of the parties 
thereto, in all cases not herein otherwise specially provided for in writing. It is further 
understood and made a part of this contract that an agent of this Company has no 
authority to waive, modify or strike from this Policy any of its printed conditio us, nor 
is his assent to an increase of risk binding upon the Company, until the same is endorsed 
in writing on this Policy; nor, in case this Policy shall become void by reason of the 
violation of any of the conditions thereof, has the agent power to revive the same, and 
that a new policy intended to replace any Policy shall be of no effect until the actual 
issue and delivery thereof to the assured, any parol contract or understanding with the 
agent to the contrary notwithstanding. 

In witness whereof the Insurance Company have caused these 

Presents to be signed by their President and attested by their Secretary 
at but the same shall not be binding until countersigned by the duly 

authorized and regularly commissioned agent at 

Attest, Secretary. President. 

Countersigned at this day of 


Mr. Carpenter — He asks one question there that might be an- 
swered, as to the aggregate insurance on dwellings and not the 


same in mercantile risks. The same plan would affect the rates 
of mercantile risks and make them much higher than on dwel- 
lings; but by grading it we give ourselves a better chance of sal- 
vage and reduce it somewhat. 

The President — I have always understood that the rate on dif- 
ferent risks was paid more to hazard than the special conditions 
of the policy. 

Mr. Carpenter — That is to say, the hazards depend on the pol- 
icy to some extent. 

Mr. Dornin — I think the advantage in the general form cover- 
ing household furniture and contents, the form used in the East, 
written under one sum, jewelry, silverware, wearing apparel, 
etc., is very great. "Whatever is lacking in making up the ad- 
justment can easily be made up in the grand final, and will save 
the adjuster a great deal of trouble and friction that you gener- 
ally run across. 

The President — We have now arrived at the auspicious moment 
in the career of the Underwriters' Association of the Pacific, 
that is laid down in the annual programme as the " Knapsack." 
I can safely say that it will be better than it ever has been here- 
tofore, because some one else than myself is now the editor. I 
can also say that I know it will be a most excellent " Knapsack/ 1 ' 
for I am aware of the fact that Mr. Grant, the editor, has writ- 
ten most of it himself. 

Mr. Grant then gave the company the contents of the Knap- 


In presenting to you the contents of the Knapsack at this 
Tenth Annual Meeting, I am depressed by the solemnity of the 
wit and humor therein contained, which is but partly relieved by 
the fun of the pathos interspersed through its pages. How true 
it is that experience alone can surely teach. 

From a cheering notion that the position of editor on a paper 
like the Knapsack was one of pleasant relaxation and profitable 
enjoyment, I have learned to regard it as a trap for the unwary, 


where, having become entangled, one can make a free spectacle 
for the curious gaze, only " breaking out " by means of a cold 
perspiration, and thus by the sweat of his face earn his freedom. 

What's in a name ? A Knapsack by any other name would be 
as melancholy, yet have I thought the " Gripsack" a more ap- 
priate title, for from such a travelled article have I taken these 
choice contributions during the last twelve months, and in every 
quarter of the Pacific Coast have I struggled with them, pound- 
ing them into shape for your delectation, disguising them with 
what ingenuity I could, that the Commission of Lunacy in its 
official capacity might pass the matter without finding a true 
bill. Whatever you may find of a painful nature, kindly con- 
sider it the work of the editor, but if by chance you meet a 
chestnut still in the burr^ that, dear reader, is a "contribution." 

When you stop to think, (provided you do not evolve ideas 
while in motion) this Pacific Coast presents a most alluring cov- 
er for an Underwriter. Insurance is an out of door business, 
ours is an out of door climate. For seven and thirty years our 
coast reputation has lived on air (barring mineral), within that 
time insurance people have waxed fat and lazy over easily ac- 
quired net surplus, also the result of wind. We are superior to 
our more southern neighbors, who are popularly supposed to dis- 
tort facts in the morning and lie in the shade of an afternoon, 
but all the same we are the most brotherly lot of antagonists ex- 

It cannot be denied that the march of civilization, including 
the influx of insurance talent from the Atlantic, has disturbed 
our semi-tropical habits, although they have made it warm 
enough for us in all conscience, while as a direct result, low rates 
and increasing fires have rendered it red hot, with an ever rising 
thermometer; you will find this more elaborately stated in the 
annual statistical chart. 

But in spite of all opposition, good nature and modesty will 
characterize insurance people on the coast for some years. Our 
modesty is but half understood, it is this quality which prevents 
the solicitor from being a bore, it also impels the assured to 
yield lest he wound the sensitive nature of the broker. It is 
modesty which calls a halt to this editorial. 

GEO. F. GRANT, Editor. 




Editor Knapsack — I received your order for supplies, arid I have tried to 
think what I could do or say that would result in filling an acceptable cor- 
ner of your voluminous receptacle. 

I have tried, tried hard, but it seems to be of no use. I have plenty of 
fixed ammunition, but I can't seem to make it fit your bore. My calibre is 
too small for the Knapsack's blunderbuss, and I don't want to have it scatter 
too much. 

Again, too, the Knapsack, properly speaking, is a useful receptacle for 
more things than are intended to comfort and make pleasant the life of a 
campaigner. But, are you, Mr. Editor, aware that it is one of the first 
things he throws aside when he is tired and worn, and every ounce weighs a 
pound. Yes, the Knapsack, with all its odds and ends, its relics of early 
comforts and necessities of army life; its remembrances of home, its bible 
and pack of cards, its pins and pills, its threads and plasters, all have to go 
before the reliable haversack is thought too heavy. Yet, when on a long 
tramp, and rations are getting short — for you have eaten them — you look 
about for further useless encumbrances, then what goes? Why, that greasy 
old friend which smells of sow-belly and coffee, with its few crumbs of hard 
tack and grains of sugar, is quietly chucked into the nearest fence corner, 
and on you plod, with blistered feet and ponderous musket, wishing that 
night or the enemy might cause the dusty ranks to halt. 

But on you go, with bending back and sweating brow, and at every swing 
the cadence of your personal route-step is relieved by the rhythmical press- 
ure of a faithful companion that is almost a caress in its clinging and linger- 
ing contact. It is your old canteen, that has been a solace and a joy forever; 
rusty, musty, battered and worn, it is faithful unto the last. The very 
name brings to mind thoughts of days gone by, and causes the pulse of old 
age to leap with the ardor of youth. Dull prose will not do, and in rhyme 
alone can the poetry of thought of those who have drank from the same 
canteen be adequately expressed. I am in no mood to offer excuses for what 
and how I shall write, but if any apology is necessary, then choose another 
name for your journal, or else expect the veteran of a quarter of a century 
ago to say something in the Knapsack about — 


How dear to my heart are the scenes of the army, 

As fond recollection presents them to view. 
The guard-house and sick-call; the cunning grey louse? ; 

Those dear little insects that each of us knew. 
The Sutler's old tent and his outrageous prices, 

The little hrush house in the rear with its smell; 
But dearer than these is the faithful old canteen, 

The battered old canteen we all loved so well. 

The rusty old canteen, the blanket-wrapped canteen, 

The battered old canteen we all loved so well. 


That blanket-wrapped canteen was hailed as a treasure, 

For often at night when returned from a scout, 
We found it a source of hilarious pleasure, 

As the apple-jack gurgled from its copious spout. 
How ardent we seized it with hands that were grimy; 

How quickly the fluid into our open mouths fell 
From the faithful old canteen that in fancy is by me, 
The battered old canteen we all loved so well. 
The apple-jack canteen; the musty old canteen, 
The battered old canteen we all loved so well. 

Whether filled with pure water from the streams as we crossed them, 

Or conveying fresh milk from the cool spring-house floor; 
We think of the thing as of friends when we've lost them, 

And burn with desire for its jingling once more. 
So now, far removed from the battle field gory, 

The tear of regret will intrusively swell, 
As fancy recalls the camp-fire and story, 

And sighs for the canteen we all loved so well. 
The rusty old canteen; the battered old canteen; 
The faithful old canteen we all loved so well. 

But what has all this to do with insurance? Simply this. Draw a moral 
from "the old canteen." As Specials, fill your Knapsack with the requisites 
of such soldiers in the field, so that you can produce lots of reliable capital 
and comforting assets from its bulky depths. Keep in your Haversack the 
salt and sugar of your vocation; truthful records of premiums and losses, to 
show that your brigade is active and aggressive; can win victories and suffer 
defeats, always ready for duty on the line of battle with a purpose to stay 
and fight it out if it takes all summer. 

If Texas hurts, quit it. If Idaho frames foolish laws, jump the territory, 
but don't give up the ship, and remember always, that the oil of the machin- 
ery is in your hands, and like the canteen of yore, the Special must learn 
how to use the can. An agent kicks; you are the one to pour oil on the 
troubled waters. Explain all about insurance to him. Rates, commissions, 
losses, hazards (moral, immoral and physical) and everything else must be 
squirted and poured out from your fertile cruse, and like the widow's of old, 
don't let it run dry. 

The Company is the Knapsack, with its essentials to rely upon in case of 
a rainy day. The insuring public, the haversack which feeds us and pro- 
vides the supplies for the hungry claimant. But the Special and Adjuster is 
the old canteen which moistens the parched tongue and dry lips of the faint- 
hearted agent or famishing sufferer. With kind words and just acts, he so 
lubricates the one and washes away the troubles of the other, that happiness 
reigns at home and abroad. 

Keep yourselves filled with the pure waters of integrity, the milk of 
human kindness, and the stimulating apple-jack of devotion to the princi- 
ples of your profession generally, and to your own Company in particular. 
Then will the manager, the agent and the assured, each be glad to drink from 
your depths, imbibe solace from your every act, and all will say, long live 

The Old Cantekn. 



" General Knapsack " — I have the honor to acknowledge receipt of Circu- 
lar No. 1 (e. g.) from your headquarters, asking for "scraps." By *'scraps" 
we high privates in the rear ranks understand you want food. How to pack 
"food" in a knapsack without soiling the other contents is a source of study 
to me now. It must be of a peculiar nature if put there at all — not of that 
soft and mushy kind which will besmear the clean flannels, nor of that hard 
and heavy kind that will make your back to bend to cany it, nor yet so sharp 
and caustic as to pierce everything coming in contact with it. If I should 
send you the regulation " hardtack and sowbelly " you would pronounce 
them flat and greas} 7 , and unworthy a place between the flaps. Among my 
stores there is some little meat, but it has grown gamey and "too fly"-blown 
for the dainty palates of those who will browse from your stock. Of vegeta- 
bles there's not much of an assortment — a rutabaga, a beet, and three or four 
mountain oysters. Of fruit I have some, but it's "forbidden" — to "pack" it 
amongst shirts, socks and blankets, besides your troops are already sur- 
feited with this kind of rations. A haversack, now, I could fill or empty 
readily, and no doubt to your satisfaction, but in the way of "scraps" for a 
knapsack, I've nothing, unless it may be that very bright scrap, the "German 
pancake," which is like the sun, "risiug mit die yeast und sinking un die 
vest." I have the honor to be, General, 

Very hungrily, your ob't serv't, 


In response to my Circular, associate Hine of New York, says: 
No you don't! That's just the sort of mendicant I am myself! I have bad 
the Monitor scrap basket strapped to my back for seventeen years and I am a 
habitual "picker up of unconsidered trifles," but they all go regularly and 
inevitably into the insatiate hopper of that bottomless pit! 

I am everlasting pouring in, like Mark Twain's bluejay into the hole in the 
roof of the deserted cabin, but I shall never get it full any more than did the 
bluejay aforesaid. I am sorry for you, but you can't get a single cent's worth 
of fun out of me, nor a reminiscence, nor nothing. 

Responding once more to gentle pressure, he says: 

Yours of the 25th is duly received, and as you appear to be in the same 
condition as the boy who was digging for the wood chuck, I suppose I shall 
have to "come down," but I think you may be perfectly certain of getting 
the flattest sort of provender from me, because whenever a man undertakes 
to be funny, or bright, or smart to order, he is pretty sure to serve his dish 
underdone or overdone, or hurt it in some way in the cooking. Nevertheless 
I will in my great compassion remember you, and will endeavor to furnish 
something for your Knapsack, if nothing more than a soiled shirt or a rum- 
pled collar. 

Here it is: 



The fire was a small matter. The stove pipe had run through the ceiling 
many years, and the double thimble which surrounded it had somehow got 
-crushed so that the heat had gradually charred the woodwork, and one cold 
day last month an extra boom in the old stove ignited the trap overhead and 
created a brief household panic! A few dippers of water put out the fire, but 
the whole Pacific Ocean could not quench the distress, mental and financial, 
which raged in the bosom of ye gentle claimant. 

In due time the gentlemanly adjuster arrived on the scene, and the lady 
whose property had been the prey of the fire fiend, thus addressed him: u In 
the first place, I want money to pay those friends who helped me put out 
the fire, and then I want your company to take immediate steps to have a 
better arrangement of the pipes and the supply of water near my property if 
I am to continue to give you my business. And now in regard to repairs; 
all these rooms have got to be torn out and rebuilt, I am not going to have 
any smoked walls or blackened timbers about my house. You needn't try to 
get out of it," continued she, observing the deprecatory air and the argumen- 
tative attitude which the adjuster was assuming; and she went on with great 
volubility and eloquence to enumerate in detail the inevitable carpeoterings, 
-and paintings, and plasterings, and paperings which would have to be done — 
and right away, too! 

After much long suffering, the crushed adjuster got a chance to remark 
that it was a case of great importance and intricacy; that he hardly felt equal 
to its settlement unaided, and suggested an appraisement by competent dis- 
interested parties. She might select some distinguished architect or builder, 
a friend of hers, who would see that her interests were duly protected, and 
he would select another competent and honest contractor or carpenter. She 
bit at the idea, and the wily villain got her signature to an appraisement pa- 
per on the spot ! Appraisers were duly appointed, and the heartless wretches 
returned an award of fourteen dollars and twenty-seven cents. The sequel 
showed its inaccuracy, for the man who finally did the repairs made a clean 
profit of ten dollars out of the job. Herein do we see the soulless nature of 
bloated corporations ! 

The following is from ex-President Hopkins: 

Editor Knapsack — You have called on me notwithstanding my resigna- 
tion of membership in your Association, to contribute from my retirement 
to your spicy periodical. You probably presume on my quondam interest in 
your work, or on what I might contribute to the interest of your annual 
meeting did "the maggot bite" hard enough; you evidently have not lately 
reviewed that chapter in Samuel which narrates the experience of Saul with 
the Witch of Endor, in calling up the ghost of the dead prophet, whose first 
words were, " Why hast thou disquieted me?" 


I am, to be sure, not quite dead yet; in fact am far more alive than for 
months and years past, but I have lost much of my interest in underwriting. 
I am not now busy with its controversies, its jealousies, its excitements and 
struggles, its statistics, its legislation or its literature. I have no more in- 
surance bills to draw, no pamphlets to write, no more combinations to sug- 
gest, no more enmities to assuage, no more losses to growl over, no more 
dividends to object to (generally in vain), no more delinquent agents to dis- 
cipline, no more disputes to decide or young men to employ, advise or assist, 
and I am out of the reach of the beggars, whom you unfortunate California 
street tenants have always with you, extorting your money under every pre- 
text except that of giving an equivalent for it, but per contra, ensconced in 
.my country home in the centre of my Elba of 80 acres (the future town of 
Olivewood) I am monarch of all I survey. 

Do not let it excite your envy that I do not care a continental snap of my 
finger for any fellow over the way, or for the approval of any board or com- 
mittee of other men, that I am bound only by Nature's laws, that I plant and 
prune, lay out trees and build houses, employ whom I please, work when I 
feel like it, and take to my hammock when I don't; that books, pen and 
papers, country hospitality and riding about the neighborhood occupy my 
time and afford pleasant employment amid this glorious scenery, and under 
the finest climate the sun shines upon! Perfect health withal, secured by 
moderate exercise in God's blessed sunlight, gives guerdon of many years of 
possible survival, which the sedentary habits of an underwriter had well 
nigh cut short at the close of middle life. 

Gentlemen of the underwriting profession in San Francisco, my juniors 
all, save only two, gladly would I contribute something of "personal experi- 
ence, reminiscences, scraps of wit, pathos, fact or adventure," but these are 
not in my line. I am forgetting, while you are experiencing the ins and 
outs, the ups and downs, the crockery smashes of your arduous and intricate 
business. My pioneer work is over, I have hung up the armor dented in 
many a tough battle, and have donned the long robe of peace and good will 
to men, even to those among you who have most worried me in days gone 
by. The old must give way to the young. Why shall we not gracefully rec- 
ognize the law of Nature which causes the quiet moss to grow over our 
mouldy memories, while the ceaseless hubbub of the active world goes on 
over our graves? Are we not like the stones thrown by idle boys into the 
water? some may make a greater splash than others, but soon the ripples 
disappear, and over their dark beds in the ooze below, the surface waves 
dance and glisten alike forever and forever! 

Among the pleasant thoughts I carry with me into my retirement is the 
reflection that for a brief period I was of some little service to your Associa- 
tion. If I mistake not, you are now celebrating your tenth anniversary. 
May your institution, already verging on its teens, attain to a vigorous man- 
hood and a green old age. May it long prove the nursery of thought, the 
stimulus of ambition, the bond of union, the fountain of good fellowship, 
the antidote of the jealousies that result from competition, and a powerful 


educator of the young and gifted among you. Never, in the history of un- 
derwriting, were the prospects so bright as they now are on the Pacific slope. 
Your example, in framing for the first time a constitution which meets with. 
the concurrent approval of all, is bound to react upon older communities and 
reflect glory on yourselves and on the brain power of our profession on this 
coast. May you adopt as your motto the Avords of Webster, "Liberty and 
Union, one and inseparable," and sing with Longfellow — 

" Thou, too, sail od, O Ship of State ! 
" Sail on, O Union, strong and great! 
" Fear not each sudden sound and shock 
" 'Tis of the wave and not the rock — 
" 'Tis but the napping of the sail, 
11 And not a rent made by the gale ! 
" In spite of rock and tempest's roar, 
" In spite of false lights on the shore, 
" Sail on, nor fear to breast the sea ! " 
Olivewood, Pasadena, October 2Wi, 1885. C. T. Hopkins. 

A special agent in the field gets at the true inwardness of mauy a racy- 
scheme. He unearths the plans of many a rival office to control agents and 
business. If he is wise he makes a mental note and files it away it in 
the recesses of his mind for appropriate reference, good naturedly pursuing 
his journey. 

If he is dyspeptic he exposes the sophistry, ridicules the sentimental slob- 
ber, unhinges the logic, and " cuts a watermelon." Generally gets himself 
disliked even where he is not feared, and in compact times drifts to the rear 
with the other tide wash. 

These gentle words are called forth by the recollection of an incident in 
which some good fellows figured; one was a large minded, well to do local 
agent, and like all locals with means, he controlled a big business. He was 
a prosperous, self-made man, and was sometimes requested to adjust losses, 
which he did with laborious earnestness. 

At the time of my story, with an anxious eye and apologetic mien, he laid 
a gnawing trouble before one of the boys travelling his way. This boy was 
a genial, fun-loving special as ever scalped a scalper. After some time, and 
a good deal of preliminary consultation, a letter from the office was pro- 
duced. The letter was the main trouble. It seemed that at a recent adjust- 
ment where policies were not concurrent, one adjuster had settled up satis- 
factorily with a fifty per cent, payment, while the proofs of our friend 
showed a total loss on the same plant. He had given the Manager all the 
facts of the case, but that fifty per cent, salvage for the other company was 
as gall and wormwood at headquarters. Hence the letter which insinuated 
that since it didn't come naturally, it should have been forced. Hence the 
disturbed state of the honest local's mind. 

1 ' I don't mind their criticism so much, " said he, "I done the best I knew how, 
fair and square, but what worries me is the doggone gibberish I don't under- 


stand. I can read American language, but this Dutch lingo gets me, besides 
it seems as if they were saying something mean about Arthur, the other ad- 
juster you know, and I won't have it, he acted white all the way through." 
A glance showed the objectionable feature of the letter to be as follows: 

11 As for Mr. Arthur, from a long and varied experience, our advice for 
your future guidance is that you take his ipse dixit cum grano salis." 

"Now," said he, " you have read the letter. What's it all about, what 
does it mean?" 

" Mean," said his genial listener with a beaming smile and a reassuring 
tone, " it means that whatever you hear Arthur say, you bet your life it's so." 

" Right they are, by gosh," said the local. 

Tiffany's Instruction Book contains, this advice: " Agents should remem- 
ber that the expense incident to telegraphing is a matter of no little import- 
ance, especially when a company is doing an extended agency business." 
The agent who sent the following telegram ' ' collect, " never had the advan- 
tage of Tiffany's acquaintance. 

The dispatch reads: " Send me rate on wardrobe, scenery, organ, violin, 
wagon and jewelry of small travelling show, estimated value about one 
thousand dollars. Answer immediately." My reply by letter said: "Rate 
one hundred and fifteen per cent., with % limit and watchman clause in pol- 
icy," but by the time the mail arrived the show was stranded in an adjoining 
town, and was subsequently sold at auction for $375! 

On the stage coming over was a Catholic priest named Father Montgomery. 
He was very jolly, witty and original, and told no end of jokes. We had a 
lady passenger with her two little boys, one a brunette and the other red 
haired. The following conversation occurred between her and the priest, 
which is well worth preserving: 
Priest — '* Madam, you have two beautiful children, may I ask their names?" 
Lady — "Certainly, sir, this one is Willie and this George." 
Priest — "I think I could suggest more appropriate names, madam. You 
should call this one Colorado, and the other Colorado Maduro." 

Editor "Kn t aps\ck" — Mr. Willikin sale lost his dwelling by fire. The 
claim was paid. Was this a sale to the insurance company? Answer. — It 
was a sail directly he raised the wind. 

Scarcely an hour passes that the mind of man does not assert its superior- 
ity over more conventional rules. Said my friend the broker to his client: 
"I cannot rebate by as much as a penny; I cannot divide commissions with 
you — it is against the rules— but, my Jriend, you shall take lunches at my 
expense for thirty days. Shall I write it up? Thank you." 


After four days' hard adjusting work at Red Bluff last summer, a small 
evening entertainment was tendered by the charming wife of a local agent. 
Seated on the veranda enjoying after-dinner cigars, the talk turned naturally 
to losses and adjustments. 

Said the Colonel, "My work represents $42,000, and I have drawn checks 
in payment of that amount." This aroused a Judge of local fame and noted 
peculiarities. " $42,000!" said he; "why I never saw any mention of it in 
the newspapers." 

"Of course not," said the Colonel, indignantly, "you don't advertise the 
fact of doing a plain duty, do you? You don't put it in the paper when you 
pay your butcher bill, do you?" "No," said the Judge, "I never did, but 
no doubt the butcher would — if I paid him." 


He had been appointed but a short time, and his letters gave evidence of 
unusual zeal and intelligence. At last he sent in a daily report — an excellent 
risk. The next day came another — a duplicate of the first; and so day after 
day he poured in daily reports of the same risk, all in first-class order. In 
reply to a telegram, he said that the printed instructions on the blank read, 
"To be forwarded daily, application and survey must accompany each 
report." "Now," said he, "if I have not followed instructions, what have 
I done?" 

Another good fellow, bent on following instructions, if it broke him all up, 
after receiving supplies transferred from a former agent, sent in his first ac- 
count current promptly, embracing not only the premiums for the month, 
but a copy of all the business shown on his register, and this it seems was 
his idea of what was required for all future statements, a monthly recipitula- 
tion of all outstanding risks, and yet he proved to be an excellent solicitor. 

The assured was an undertaker, the renewal was being pressed warmly by 
competing agents; finally, with a funereal twinkle in his left eye, he offered 
the risk to whoever would " take the premium in trade." 

This same chap, complaining of a rival undertaker, accused him of cutting 
rates, so to speak, and influencing by unprofessional means the patronage of 
the town. "Why," said he, " the unrepentant disciple of Jimmy McGinn, 
in order to steal my trade, throws in three hand grenades with every coffin." 

"all the same," fire loss. 

Many of you will recognize a familiar note in the following bit of "human 

" That durned speckled critter with a broken horn, " said an exasperated 
farmer, "makes more trouble than all the cows I've got put together. I'd a 


gi'n her away if anybuddy 'd had 'er, but they wouldn't. I'd a fattened her 
for beef, but 'twould cost more 'n she's wuth." 

That night the cow was killed by a railroad train, and the farmer, with 
tears in his eyes, told the railroad official who came to pay for her, that " if 
it had been one of his other cows he wouldn't care so much, but to lose that 
valuable animal, the only thoroughbred he ever had or expected to have, was 
a misfortune almost beyond money remuneration." 

"didn't know him." 

He was from Red Bluff, I believe he said, and sat beside me, as the train 
went gliding through the beautiful groves of oaks and through waving grain 
fields of Butte county. Filled with admiration of the charming works of 
nature around us, I could not help exclaiming, " By George, this is God's 
own country ! " We were just passing a comfortable looking farm house, 
nestled under the trees, and my neighbor remarked with interest, " W T al ! 
He's got an allfired fine ranch. Does he live in that house yonder ? " 

At a recent loss, when the adjusters' clause was in, the assured s< emed 
most anxious to secure the comfort of the boys. This was in the early stages 
of the proceedings. Before the week closed, however, he had become in- 
different, I may s »y antagonistic. At the close he paid the adjusters' bill of 
expense, at the same time saying, 

"I see you have forgotten nothing which you have used on this trip, in- 
cluding the cigars and wine which I presented to you, and which you have 
charged to me in your account." 

Tableau ! 

When the talk of a new "Anglo- Nevada " company became street gossip, 
and the various officers elect were in more or less hiding from the swarm of 
office seekers and place-hunters, I met an old-time acquaintance, who in 
former years ministered to me fluid refreshment over a polished counter. 

On his usually large and beaming face hung an anxious frown. His erst- 
while air of calm content was gone, and in its. place showed nervous excite- 
ment. Could I use my influence to get him a position in the new company? 
Would I help him to frame a letter to the manager ? I could ! I would ! 
But first I must know his qualifications. Long and earnest examination re- 
vealed his best points to be an excellent story teller, a good caterer, a reliable 
messenger. On the latter he laid great stress, for he had a horse and buggy 
which he would " throw in" to obtain a situation. 

Before long our good friend " Farney " was the recipient of a written appli- 
cation, gotten up in the best style of the author, begging for the position of 
"messenger," to deliver expiration notices. It is now on file, to be consid- 
ered next year. 



Disclaiming any knowledge of what the committee on "Forms of Policies" 
may say on the subject, or any desire to officiously "chip in" upon their 
remarks, my field observation doth move me to say a few words about mak- 
ing policy blanks too convenient for the agents. 

The article which is easily obtained grows cheap, and the trick which is 
easily accomplished loses its charm, and whenever you make an insurance 
policy so simple that any fool can issue one, the fool himself will hold it in 

I don't believe in too much red tape, but I think we are gradually overdo- 
ing this matter of convenient forms. I say " we," for there are very few of 
us who have not at one time or another permitted "tinkering" which we 
felt was unwise. 

It seems to be a popular sort of way to save trouble and special work. 
Instead of sitting down with an agent and explaining the manner of writing 
policies and why this or that should be so, we place fences around him in the 
shape of printed forms, so that he cannot escape. Of course, if you remove 
the fences, he will be eternally getting out of the path. But what are we 
"good shepherds" for? Methinks I can hear you whisper, " to get busi- 
ness," and not to educate the ignorant. Isn't it the object of this Associa- 
tion to educate the ignorant, and would it not be much more desirable to 
have a smaller number of agents, and have them better posted, than to have 
such a great number of raw recruits? The former would do their business 
properly, because they understood what they were doing, while the latter 
class do their work as automatons, with the aid of "convenient forms." 

Of course there is no objection to placing convenient forms in the hands of 
competent and trained agents, but observation would lead me to remark that 
convenient forms are not issued as often as a convenience for trained agents, 
as they are for a means to obtain business from some cross-road agent, to 
whom the special, in his haste to get to the next town, does not give the 
proper instructions, or any instructions at all, for that matter. 

And thus, by placing in the hands of numberless raw recruits convenient 
forms of policies, the issuance and completion of which requires neither 
brains nor care, we are gradually lowering that standard of dignity which 
ought to characterize the insurance contract. 

Nor is it the ignorant agent alone who loses respect for the policy, for the 
very fact that he is authorized to write and issue policies helps to dispel what 
respect his customers may have for the insurance contract. I am convinced 
of this, and 1 once had a granger tell me, "Well, if that blankety blanked 
muttonhead down at the ferry kin issue policies, I guess they can't amount 
to much." "EX-LOCAL." 


"I have taken my last trip, I am going home," said he as the clock struck 
the midnight hour. 


The nurse looked at the doctor with a significant glance, and whispered, 
41 His mind wanders." 

Presently he lifted his feverish head from the pillow. 

"Any letters from the Manager?" he inquired, "there ought to be letters 

Then he slept, and in his sleep he was a boy again, babbled of fishing 
streams far up among the pines and cedars of the mountains, where the trout 
played; of school days, and of those who had been his companions in the 
misty past, while the wild winds of an Arizona desert rattled the windows 
of the little inn where he lay. 

At one he suddenly awakened. 

•'All right! " he exclaimed in a strong voice, "I'm ready." He thought the 
porter had called him for an early train. The doctor laid a soothing hand 
upon his brow, and he slept. In his sleep he murmured: 

"Business, my boy, we want business; what have you done? That's a 
good risk, who took it? I must get business. I'm off, good bye." 

He dozed off, and the doctor counted his pulse; suddenly the sick man 
started up. 

"Give me a letter from home. Ellen always writes to me here. She never 
disappointed me yet, and the children — they will forget me if my trips are 
too long — only one more stop to make, and I will be home — home — home for 

He slept again, and again wakened with a start. 

" No word from the Manager yet? " 

He is going fast now; the doctor bent over him, and whispered in a 
comforting voice the words of promise: 

"In my Father's house are many mansions, if it were not so I would 
have told you." 

"Yes, yes," said the dying man faintly, "it was a clean loss, and shall be 
paid promptly. Ah, a splendid company that — deals fair and square with 
its customers and men." 

The chill, cold morning dawned, the end was very near. The sick man was 
approaching that undiscovered land where all losses are honest and all claim- 
ants are fair; that mysterious land from whose bourne no traveler returns. 

"I'm going off the road," he murmured faintly, "the Manager has sent 
for me. Write to Ellen and the children that I am coming — coming — her 
picture and address — in my breast pocket — call me for the first stage — it's 
my last trip, and I'll see Ellen and the children on Christmas." 

They laid his head back on the pillow; he had finished his trip — he had 
gone home for Christmas. 

didn't know it was loaded. 

One of the few men outside of the profession whom I have heard speak in 
glowing terms of adjusters, is a resident of Yolo County, who once had an 
-experience something like the following: 


He was a claimant under a policy which covered on hay, grain, harness, 
and the barn containing the same, a separate amount on each. In making 
proofs he was free from nervousness and apprehension, answered all ques- 
tions readily, and gave detailed items. Between the commencement and the 
signing of proofs of loss, he ordered two bottles of Extra Dry, and was about 
to insist on a third, when the adjuster claimed his attention by the simple 
statement that the proofs were a sulphurous lie from beginning to end. 
Continuing, he said: "You are certainly entitled to the prize for ingenious 
and lofty lying; your statements put Ananias to blush, while Sapphira trem- 
bles for her long-sustained reputation. Compared with you, Beelzebub is a- 
modest exponent of truth! The hay you so carefully described, existed only 
in you imagination, while the wheat is a fiction of the brain; the amount in 
bulk would fill the barn from foundation to the peak of the roof; as for the 
harness, there is not even a buckle to be panned out of the ruins; while the* 
barn itself, from what I have been able to learn, was worth S43S at time of 
fire, instead of $1,200, as insured by the policy. I respect talent when 1 meet 
it, and your talent for falsifying is of the highest order. In return for your 
policy of $2,500, I will give you a check for $438, less my expenses." 

During this statement of facts, the Yolo man was apparently an earnest 
and admiring listener. 

" Can I cash your check right away?" he asked. 

"Yes," was the reply. 

"All right," said he; "hand it over. And now, gentlemen, suppose we 
have that bottle of arnica." 

In reading the following letter, it is necessary to understand that the 
writer is in dead earnest. He is a serious German, with a thick accent, de- 
manding what he believes to be justice. Prior to this communication, he 
had exhausted his oral efforts to convince those obstinate adjusters. 

Copy — Verbatim et literatim. 

Sax Francisco, Feb. 1, 1886. 
Mess, cO Gentlemen — 

Permit me to present to you this case of damages property. You of cour e 
admit the fire, I can also prove to you that there was a dense smoke in both 
shops and that such a smoke is absolute injurious to pictures 

If I would let the pictures, frames & mouldings in that condition, they 
wood in less than 6 months be second hand mdse only fitt for auction sales 
and if I would come to you in 3 months with tears in my eyes k say! 
Gent.! my damage was much larger than I expected, you would reply! you 
foul! why did you not make your proper claim at that time. 

Now, gent, having expirience and common sense myself I still consul: ed 
mine and other gilders, manufacturer of mouldings and old picture dealers 
and I arrived at the conclusion that it is a military business necissity whether 
you pay for it or not, to remove clean refitt regilt partly & hang again every 


picture in the house about 230 also clean & revarnish every oil painting & 
chromos looking glasses & gilt frames, also 

Remove clean varnish, rebinding 12250 of mouldings containing Florenz 
gilt, patent gilt, gold moulding oxidized & veneered &. gilt. — 

Moulding in white, walnut, oak, redwood suffered no damage I have en- 
gaged gilders & mechanics to go on whit it for my own protection. 

No gent, as you was rather deaf to my appeal on Saturday permit me as 
a matter of illustration relate you an alegory 

When I was at Stuttgardt, I was acquainted with the best taylor in town, 
who had an order from a colonel for a No 1 dress suit; when done the lady 
of the house opened the suit, and said! 

For God saike take this stinking tabaco suit away it will make me sick 

and condement my other toilet & my hole house, the taylor protested, and 

the Col. was called for — Hoo! said he that little smell smoke dont amt to 

much; the lady refused to accept it, and before the court the journeyman 

taylor admitted that he smoked a pipe secretly, and so gent say you that that 

smoke dout amount to much, but I am the lady in this case and respectfully 

ask you for the smal damage of $750.00 there is a reasonable & probable 

claim of $250.00 for mdse who will look, after all, only second hand which I 

will however wave 

Yours respectfully, 

» *. * * * 

This communication seems to have had the desired effect, for his next let- 
ter reads as follows: 

Mr. adjuster— Dear Sir: Please sent copy of statement to the 

Insurance Co., as all others have paid. I beg to thank you specially for your 
sense of Justic, but not for any liberalitj 7 . 

Am yours respectfully, 

In these days the local agent is forced to the front and becomes a con- 
spicuous figure. Once a special agent falling upon* piping times of peace, 
with a paper to prepare for an annual meeting, wrote a brilliant speech, of 
which the local agent was the theme and hero. At other times and places, 
other specials and managers of more or less ability followed the lead until in 
the fashion of the hour the local was surprised to learn that he was the 
"mainspring," the " motive power," the "first cause" (and other happily 
expressed titles) of underwriting and insurance. 

To the credit of general intelligence, be it said, this large body of workers 
pursued their way as usual, without attempt to trumpet the importance of 
position. Before the subject dies, however, it will be strange if a few zealous 
friends in office do not create an " issue' ' which will perplex and annoy. 
The Reverend John Doe has truly said -'many men have many minds.' ' 
The minds of local agents do not differ from the general run of humanity, 
and if a local has the sense to know his true relation to the business of fire 


insurance, he is so much superior in that respect to the mind who does not, 
whether such mind belongs to one in power or otherwise. 

It cannot be denied that the local agent makes "big money." He makes 
more at insurance than his ability could command at other respectable em- 

He often receives more in commission during the year than his general 
agent in the same time, salary and contingent combined. 

The laborer is worthy of his hire. Nobody disputes that, but if he be 
assisted in his labor by one or more special agents, one or more teams, one or 
more extras, like office rent and contingent commission, or by a flat commis- 
sion which covers the same, this " first cause," "main spring," ''motive 
power" sort of talk becomes mere taffy — wasted sweetness. 

If my fellows can persuade me to join them, and all of us keep " our eye " 
on the secret of success, viz: an income which shall be greater than expendi- 
ture, even in the face of the multiplied conflagrations, we will then see that 
by a natural process the local agent will be found filling his difficult role 
with satisfaction to the company and pleasure to himself, at a uniform com- 
mission, not too light, not too heavy, while the number of locals will be re- 
duced from a grand army to an " old guard." Mind you, I am particular to 
say, if my fellows can persuade me to join them, for at present writing I do 
not intend to do anything of the sort. What is the good of my neighbor to 
me ? Nothing. What is the success of the theory to me ? Nothing. I am 
of the third generation of Underwriters. I inherit a policy skillfully worded 
with printed conditions, that I may catch my neighbor napping in his form 
of policy. I inherit a right to construe the law after my own mind, and if I 
can make the court see that I am right, let my neighbor pay the cost of suit 
and learn wisdom. I inherit a right to look "yes" and speak "no." In 
point of fact I am following in the footsteps of my illustrious predecessors, 
and such emotions as peace, faith, charity, and the like are by precedent left 
outside my office door. 

It is, therefore, my undisputed right to rig a purchase whereby I can con- 
trol the local agent who controls the business, and so long as I do this in- 
side the law, what matter if my action breaks up the board of compact. I 
will be " heeled" and equipped for the new order of fight, whatever it may 
chance to be, but I object, all the same, on business grounds, to the insinuat- 
ing advances which tend to encourage the tail to waggle the dog. The office 
boy is a very important factor in the business of conducting fire insurance. 
So is the supply clerk, and the policy writer, the correspondent, and the 
United States mail system. Let us be just, if we are not generous, and to be 
fair and correct, give each individual his schedule rating of excellence. 

The bold and aggressive need no pat on the back. The weak and vacillat- 
ing are never brought to a permanent par value. The cunning take advant- 
age of the popular movement to secure a higher commission than their serv- 
ices are worth. A higher commission than companies can afford to pay. 
A long list of good local agents is as fine a sight as a company's officers care 


to see. An occasional word of commendation is an incentive to any person, 
high or low; but to drag the agent from his accnstomed place, fill his mind 
with ambition to exercise a power which he does not and never can possess, 
is an act of injustice to him, an injury to his future, a delusion, an ab- 

It was a legitimate experiment with the special agent who wrote that first 
speech. It is painful in its effect, to those who flocked after him, even as a 
barbed wire fence is painful to the band of sheep who crowd after the first 
scarified intruder to forbidden ground. 

we've been there. 

An active special, whose home is on the rail and homestead in "the City 
of Oaks," having had three days at home without hearing of a fire or a non- 
remitting agent, began to yearn for the gentle voice of the heathen Chinee 
as he sings, "Beefee takee, mutton clop, ham and eggee, tea or coffee," and 
for the dingy room, the cold clammy sheets, and the delicate perfume of the 
bedbug poison. He found fault with the dog, kicked the cat, and was show- 
ing his nervousness generally, when he was gently chided by his better and 
more sensible half, thus: 

"My dear, take your valise and walk around the block, and you will be in 
a better humor." 


I am called upon to adjust a loss upon which the policy insures four cows. 
The claimant, a Milesian, says: "The four cows were burned, but one of 
them was a bull. Please advise liability." 

Answer. — It was the intention that the cows should be covered. There is 
no liability for the other animal, unless it is a bull of the agent. 


A San Francisco special, examining his risks in a Montana town, had a 
nice hotel to look through, and, as usual, was attacked by the landlord owner 
with a low rate (and, by the way, what a hotel keeper don't know about the 
hotel fire hazard and the exorbitant rates charged by insurance companies is 
only equalled by what an insurance man don't know about hotel keeping). 
But this particular hotel man had purchased a first-class, red painted fire 
extinguisher, generally considered by the insurance fraternity as more orna- 
mental than useful, expressly to get a reduced rate. 

Mr. Special talked the other side, and they parted with the understanding, 
on the part of the hotel man, that he would get a lower rate or not insure, 
and on the part of the special that if he got a lower rate it would be in some 
other company. 


About three months later the hotel burned; tire started in the lamp-room 
under the stairway, and the adjuster found everything burned except the 
red extinguisher. An inquiry as to how it was saved developed the fact that 
the night clerk on duty that night was anew man, and when the fire started, 
seeing this "thing of beauty" behind the bar, took it across the street and 
put it in a fire-proof building. 

Moral. — Fire extinguishing appliances are more useful as rate reducers 
than as fire extinguishers. 


Editor Knapsack — "This is my story, sir; a trifle, indeed, I assure you. 
Much more perchance might be said, but I hold him of all men most lightly 
who swerves from the truth in his tale." F. 

"Adjust loss J. L., on Canyon City Koad, — miles from The Dalles — 
see Dalles agent," read a telegram which I received at Portland, Oregon, on 
the 3d day of January, 18 — . 

The prospect for a pleasant trip was anything but promising. The weather 
was unusually severe, and the route I would have to travel was through an 
almost uninhabited country. Consoling myself with the reflection that ad- 
justers can't always have soft trips, I started for The Dalles. 

Arriving there, I called on the agent of the company having the loss and 
obtained a copy of the policy and such information as he had in regard to 
the assured and his loss. The policy read as follows: " $5,000 on his stock 
of general merchandise, including jewelry, while contained, etc., situate — - 
miles from Dalles, Oregon, two miles west of Canyon City Stage Koad." 

The information I received from the agent was that J. L. had formerly 
been a jeweler in the town of X, Oregon, but had gone out of business some 
months prior to the fire, and purchased a stock of merchandise for trade in 
the mountains. Being well known as an industrious, temperate, honest, 
though eccentric man, the agent had not hesitated in giving him all the in- 
surance he wanted. He presumed that the jewelry mentioned in the policy 
was a portion of the stock that he had retained from his jewelry stock when 
he sold out. 

The morning was bitter cold when I started, but the sleighing was excel- 
lent, and, warmly wrapped in blankets and furs, I enjoyed the ride over the 
smoothly beaten road. Just before sunset the driver pulled up his team at 
the bottom of a deep canyon through which flowed a large creek, and re- 
marked, "There comes your man." 

Looking up the ravine, I saw a man rapidly approaching, and was soon in- 
troduced to Mr. L. He was a powerfully built German of about forty years 
of age, but notwithstanding his apparently vigorous frame, he had not the 
appearance of one who lived in the mountains, his face being almost lividly 
white, and his eyes had a glittering, uncertain, peculiar expression, suggestive 
of intense nervous excitement. 


He greeted me pleasantly, and apologizing in good English for the necessity 
which would compel me to walk the remainder of the distance, about two 
miles, we started over a rou^h trail, deep in almost untrodden snow. He 
was a pleasant conversationalist, and though the road was heavy, I was sur- 
prised at the apparent shortness of the trip, when we arrived at his cabin. 

It was a rude log affair, whose interior had, however, a cosy appearance, 
when, with lamp lighted and a generous fire bl izing in the ample fire place, 
we sat down to a supper of venison steak and bacon. All of his papers were 
saved, having been kept in his cabin, which was situated on a creek about 
one hundred feet from the store building which was burned. On examining 
his books and papers, I ascertained that he had not sold a dollar's worth of 
goods, and that his entire purchases amounted to less than one thousand 
dollars. On questioning him, I found that he had sold no goods because he 
had only had the goods there a short time, and that a deep snow had fallen, 
cutting off communication with the world generally, and his expected cus- 
tomers in particular. 

It bad struck me when I first arrived that it was a queer place to start a 
«tore, for it was surrounded on all sides for many miles by a mountainous 
wilderness. Satisfying myself that he had produced all his bills of purchases, 
I remarked to him: 

"You have lost only about $1,000. You never had more than $1,000 worth 
of goods in your store, and yet you have five thousand dollars insurance on 
your stock, which to say the least appear-; strange." 

"You have forgotten the jewelry," he said, interrupting me, "the diamonds 
worth ten thousand dollars," he added. 

There were four diamonds, uncut but mounted, he stated, but for a long 
time I was unable to get him to tell me where he obtained them, but finally, 
after placing me under the most solemn oath not to reveal his secret, he 
made a statement which, as nearly as I can remember, was as follows: 

I was born in Amsterdam, and learned the trade of diamond cutter and 
setter. I read much about diamonds, and in a work I came across, found the 
information that in America were places where persons seeking might find 
diamond mines. I was ambitious to become rich, and for several years 
pinched and starved myself to save money to take me to America to prose- 
cute a search for diamonds. I felt sure of finding them, and built many cas- 
tles in the air, based on their discovery. 

A relative opportunely dying, leaving me several thousand dollars, I 
started for America. Traveling and prospecting for several years, I gave up 
hope and settled down in the town of X in Oregon and opened a jewelry 
store. I did not entirely abandon my original idea of searching for dia- 
monds, and spent a portion of each year in the mountains ostensibly pros- 
pecting for gold. 

One day, only a few weeks ago, I came to this place, and searching in the 
creek, to my great joy I found four diamonds. I made no further search, 
hxit immediately went home, sold my business, and purchased a stock of 


goods, principally provisions, telling the merchants I wis going to the* 
mountains to prospect for gold, and would take a stock of merchandise to 
sell to Indians to pay expenses. 

Meeting an insurance agent, who had learned of my intention, he asked 
me to let him write a policy. I told him to give me a five thousand dollar 
policy on merchandise and jewelry. I had set the stones as rings, roughhv 
but sufficient as I thought to make them come under the head of "jew- 

By the time my store building and cabin were completed, the snow had 
fallen heavily, and I had not searched further for diamonds, but was waiting 
patiently for a "Chinook " wind to come to clear the snow, so that I might 

Before the completion of his story, he had become frightfully excited, and 
the terrible conviction forced itself upon me that I was dealing with a mad- 
man. It seemed as if my heart had ceased to beat, and I trembled violently 
in every fibre of my body. A^ne with a madman, who at any time might 
become a maniac. No chance for help. The thought was appalling. 

With a great effort I managed to regain partial composure, and racked my 
brain for some scheme to escape from him. I finally decided on my course.. 
I conversed pleasantly with him, talked diamonds, talked partnership, to- 
which he seemed favorably inclined, and after awhile he lost his excited- 
manner, and was again the affable, agreeable host. 

I told him just before retiring for the night that it was unusual to allow 
anything on such slender proofs, but that his reputation among the business 
men of The Dalles was so good that I would allow him a total loss, and make 
out the necessary papers in the morning. 

The cabin had but one room, and the only sleeping accommodation was a 
rough bunk. My host told me that I could occupy this bed and he would 
sleep in his large easy chair. I went to bed, but not to sleep. I had made 
up my mind to escape as soon as he was asleep and take my chances of find- 
ing my way to s^me house before he could overtake me. I was unarmed, 
and I knew that he had a revolver. 

I waited anxiously, counting the minutes, which seemed to my impatience, 
hours, before I dared make a move. He was apparently asleep, and after 
cautiously dressing, with shoes in my hand, I made my way stealthily to- 
wards the door. I was in the act of lifting the latch, when my ear, painfully 
acute to every sound, caught the sound of a movement behind me, and look- 
ing around, found my host wide awake, sitting in a lounging position with a 
cocked revolver pointed at me. "That is your little game," he remarked;, 
"you thought to escape without paying me," he added. 

He then told me that it was useless for me to try to escape him, that he 
would kill me if I did, and then commanded me to make the necessary papers 
and draft for five thousand dollars. I was forced to do as he required, but 
signed the draft "A Boarder, adjuster." The driver had said when he in- 
troduced me, "A boarder for you, Mr. L," without mentioning my name,. 


and he evidently thought that was my name, for he had addressed me as 
" Mr. Boarder " during the entire evening. 

I told him he would have to get the endorsement of the draft by the Dalles 
agent before he could cash it. He had told me that he would go to the Dalles 
on the stage the next day, and would securely fasten me in the house until 
his return. On inquiring when he would return, he replied, "in about three 
days, if I don't forget it." I felt sure he would not return, and my only hope 
was that the signature to the draft and my non-appearance might result in 

After taking a receipt from him, I went to bed, but there was no sleep for 
me. I schemed and plotted until morning to devise some plan to outwit a 
crazy man. 

After breakfast I asked him if 1 could try my luck in his mines. He con- 
sented, but told me that with snow and frozen ground to contend with, I 
would not be able to find anything. With pick and shovel I worked with all 
the strength and energy I possessed. He had described minutely the stones 
he had lost, and I had a desperate hope of cheating him with other similar 
ones. It was almost a hopeless task, but it was a question of life and death. 

After several hours of incessant toil, I discovered four stones which I 
thought might answer my purpose. Just before noon, I returned to the 
cabin, and informed Mr. L., in answer to his inquiry, that my search for dia- 
monds had been fruitless. I then asked him if he had searched the ruins for 
the diamonds, to which he replied that he had not. I then remarked, "if 
the diamonds are genuine, fire will not injure them, and we ought to be able 
to find them, and if we find them, he could not of course expect the company 
to pay for them." He assented to all this, and informed me that the dia- 
monds had been put in a giant powder can, and were on a shelf in the north- 
west corner of the store. 

I told him I would search while he was getting dinner. I found many cans, 
and selecting one which had been broken by a falling timber, implaced the 
stones I had obtained in it, and then covered it with ashes. I went to the 
cabin and informed him that I had not found the can. After dinner I pro- 
posed that he should go with me and continue the search. He agreed to 
this, and show r ed me where the can was at the time of the fire. I had hit the 
place exactly, and after a pretended search of a few minutes, pulled the can 
from its concealment and handed it to him. 

This was the trying moment, and I- felt as if a terrible weight had been 
suddenly removed, when, taking out the stones, he exclaimed in an excited 
tone, "they are here — they are all right. It only required this test to prove 
that the stones are genuine, and I suppose you are convinced that they are 
real diamonds " 

I was only too happy to be convinced, and to agree to pay for the gold in 
which they were set, which had undoubtedly melted and disappeared. He 
surrendered the original papers I had made, and I made out new ones, with 
which he was perfectly satisfied. I was not, however, happy until I was . 
safely on the stage. 


When I arrived at the Dalles, I placed him in charge of the sheriff and he 
is now in the asylum at Salem. When we searched him for the stones, they 
•could not be found, so I do not know whether they were genuine or not. If 
you doubt my story, go to the insane asylum at Salem and ask for Mr. L. 
He will tell you that an adjuster, to cheat him out of his insurance money 
and steal his diamonds, had him locked up in the asylum as a crazy man. 


Dear Knapsack — In reply to your order for "something," I send a recollec- 
tion of a trip. Distance lends enchantment. Time has repaired the damage. 

It was a call to a remote settlement to adjust a los-<. First came an ocean 
voyage. Then it was I won my sea-legs, for the sickness of the time was 
such, I threw up all hope of seeing home again, folded my wasted hands over 
my hollow chest, willing, even anxious, to join the "great majority." I have 
never pretended to own a liver since. 

Beaching port, my road lay through a forest of redwood — a "short cut" of 
sixty miles, by saddle. Now, I am an admirer of horseback riding — in 
others, and up to the time of which I speak, had gained some knowledge of 
it by means of books and conversation. Sixty miles seemed a big distance, 
but could anything be worse than that sea trip? I tackled it, taking for 
guide and companion our local agent, the faithful Peter. 

The scenery was magnificent, the air bracing. The Anna Maria river 
danced and sparkled at our feet; I took notice of this early in the ride. I 
was also conscious of sitting my steed remarkably well, contemplating with 
much pleasure future exercise of the kind in the Park and elsewhere. 

Soon we came to a precipitous place, which Peter was pleased to call a 
"little sideling." Down we pitched, leading the animals. Kemounting, I 
was pained to find the seat much harder than before. Still, as we picked our 
way through the woods, chatting gaily, the scent of balsam and the sight of 
moss and fern distracted attention for awhile. We lunched at a farmhouse, 
having made good progress. All that was amiable of my disposition, I left at 
that farmhouse. No freak of imagination, no charm of nature, could hence- 
forth disguise from me how hurt and bruised that miserable saddle had ren- 
dered me. The horse became a stumbling, torturing brute. The Anna Maria 
river sprang up unbearably in all directions, having as many forks as one 
would need at an annual banquet. 

Peter, too, was exasperating, he rode so fast and so uncomplainingly. 
Why! he would drop the reins and clap his hands to urge the speed, singing 
at the top of his voice, and in other diabolical ways show his enjoyment of 
the time. Eventually I learned to know the danger of the four sharp jolts 
when we came down to a walk, and the painful bumps when we start up. I 
■ avoid a trot, find a lope preferable, change position often, now leaning for- 
ward, now backward, now sideways, I cling to the horn of the saddle — there 
.are pains where were never pains before; each leg seems to weigh a ton. 


I think of all the expletives which a varied experience has rendered familiar 
to my ear; I am saturated with mental profanity; I hate myself; I hate Peter; 
I hate the world; I am tortured and groan aloud, my sand has run out, I give 
up and cry for quarter; from that time we wa'k the horses. 

The sun goes down, we move silently on, moonlight easts weird shadows, 
no sign of human habitation; up and up, down and down, we go; new sen- 
sations come, hunger, thirst and cold; we cannot see the trail; we are lost! 
It is nine o'clock; we reach a clear spot; water reflects the moonlight; it is 
the refreshing Anua Maria. I tumble to the ground; the faithful Peter 
builds a fire and mounts guard; I shiver myself to sleep and troubled dreams. 
At daylight we grope about to find an outlet. There within one hundred 
yards, with blue smoke curling from the chimney, stands a house, the house 
of a rancher, an old friend of Peter's. We share his breakfast, and meditate 
on the irony of fate. 

By noon, still walking, we are at our journey's eud. The details of the 
adjustment are conducted standing. My desk is a mantelpiece. When I am 
told my horse has the 4 'pink-eye," I rejoice aloud; it is the hand of Provi- 
dence. I take the long way back in a wagon; wagons are good enough for 
me to this day. 

Editor Knapsack— The enclosed letter, which I hand you for your paper, 
speaks for itself. It is one of many received during the year, all to the 
same purpose, viz: how to understand the insurance lingo of the Rate Book, 
which has become as household words to the insurance offices of San Fran- 
cisco, but is a sealed book to the local in the country. 

My correspondent is, without doubt, a wit of the first degree, but there is 
a serious question involved in his laudable effusion. Is it possible, think 
you, that the combined talent of the Rating Committee is unequal to plain 
business common sense English language? I have a right to ask, for I have 
served on that committee, and could not suggest a remedy to them. 

My Dear Sir — I have been running a merchandise store in this country 
town for some years with success and comfort; have made a little money, 
and have an interest in a number of small ranches whose owners have been 
dealing with me. Not long since the special agent of your company came 
along and persuaded me, much against my will, to accept an agency of the 
company. I must say this view of the subject was an attractive one. I 
having a commission on the premiums, and nothing to do with the losses — 
that feature captured me. He said he would send a few blanks when he got 
back; but my God! I had no idea I would get such a consignment: blank appli- 
cations, blank endorsements, blank monthly statements, blank expiration 
notices, and blank policies. I haven't tackled the job of filling any out yet. 

I got a letter from you as general agent, confirming my appointment, and 
.you express a desire to hear from me freely in case anything should come up 
in the course of the business to puzzle me. Now, the first thing that puzzles 
me is how to make a rate on the first application I got— the Eureka Hotel. 


That infernal little red book called the Rate Book, I thought the special had. 
made quite clear, but now I don't believe he understands it himself — I don't. 
I never had much to do with mathematics except calculating interest, ad- 
ding up an account and guessing at the weight of hogs. This little innocent 
book is worse than an algebra. 

The first thing I tackled naturally was the rule for determining the 
rate of premium; my customer (do you call him a customer or a client?) was 
waiting while I read the rule before making out his bill. I had to tell him to 
come back in half an hour, just as he got oat the door I saw the explanation 
about star hazards and called him back, saying here was an explanation, and 
I would tell him in a minute, but when I read the explanation I told him to 
come back in two hours and a half; that " explanation" stumped me. The 
rule would be bad enough without all the stars and daggers, but they would 
puzzle anybody. I turned to " Hotel" on the list, and it there says, see Rules 
6 and 18, also see Fresco work. What the devil fresco work has to do with a 
country hotel, I don't see — we are used to "fly fresco " but nothing else. I 
I looked at Rule 6, which goes on about buildings occupied for a common 
purpose. The " Eureka" is a perfectly respectable house, so don't fit that 
rule — we've none of that kind of houses in our town anyhow, we go to the 
city for that kind of thing. Rule 18 fits the "Eureka," for transient guests 
come there, and there is a bar for regular visitors. A part of the " Eureka " 
is an old cloth-lined structure, and part is brick, frame and plaster; there is a 
grocery store at the corner room on the ground floor; that is in the frame 
part of the building and comes under Rule 7, about the compartments. 

There is a wooden awning at this corner, a coal yard next door where there 
is a steam engine for chopping wood, and a livery stable next to that. When 
I came to figure upon the brick, iron, cloth-lined grocery with coal oil, awn- 
ing, coal yard with steam engine, and consider all the daggers, stars, explan- 
ations, etc., I thought I would write to you, for I haven't cheek enough yet, 
being only in the insurance business a few days, to tell him how much he 
would have to pay; besides, that alphabetical table of hazards, and classifica- 
tion of buildings rather bothers me; when you find it is a "B" class, some- 
thing in the rule puts it in " C " class, and when you fix it in that, then you 
find another rule that shoves it in "D" class. I haven't been able to keep it 
in one class long enough to fix the rate. 

There is a woolen mill here, and I tackled the proprietor. His stock is 
mainly cloth and blankets, but I find a blanket policy is prohibited, so I 
couldn't do anything with him. How about that? he said he had no trouble 
bsfore, and I said it was probably due to the Compact, and he thought the 
Compact was a fraud. Is it ? 

I can't get that "exposure" business through my wool. Most of our 
buidings are on the main street, and the outbuildings are on a corresponding 
row on the rear of the lot. Do these outbuildings constitute an exposure? 
They all have separate entrances on the ground floor. I always come back to 
that explanation pasted between pages 4 and 5. Does not the man who drew 


that up also draw a big salary? I'd like to fix the basis rate with the stars 
and daggers to the man who got up that red book. I had no idea insurance 
business required so much figuring I thought all we had to do was to ac- 
cept the premium and dispute the losses, which is easy enough. 

Now, if you can give me any lucid explanation of how to definitely figure a 
rate on a building without 47 exceptions and provisos, I will stick to the 
agency. Yours very truly, 


A farmer, from loss to be secured, 
For many years his dwelling insured, 
But at last one day, when his luck had turned, 
His house and all his buildings burned. 
The adjuster no chance for salvage could find, 
So he filled out his proofs to have them signed, 
But the farmer read them and shook his head, 
•' You will pay for the house, I see," he said, 
'* But where in the world will I get any pay 
■■ For my barn and sheds, my tools and hay ? " 
The adjuster tried, but all in vain, 
To make the matter very plain, 
But it only seemed that the more he tried 
The less was the farmer satisfied. 
At last the farmer a lawyer employed, 
Thus made it impossible suit to avoid. 
So the case was tried and the judge's decision 
Was given as follows with great precision: 
■• It really seems to this court very funny 
" That, having for years use of this man's money, 
" The company now to pay should refuse, 
" And this court such action will never excuse. 
" They say that the policy the barn did not mention, 
11 But the plaintiff claims that it was his intention 
" To insure all he had, and it is very clear 
11 That the word dwelling, as it is used here, 
" Every barn, every pigsty and shed does include. 
•• This court at least will decide, that it should. 
"This large British policy I hold in my hand 
•* In size ought to cover any barn in the land. 
" It surely holds good in law all the world over, 
** A building of any kind its contents must cover, 
11 So the court here decides that defendant must pay 
" Fo» all that the plaintiff lost that day, 
" For all tnat he meant to insure, but forgot 
" To mention when he the policy got. 
" And I really think that the company ought 
" For even allowing this suit to he brought, 
"And this matter the mind of the court to trouble, 
" For contempt of court to be made to pay double.' 



The President— It is very evident, gentlemen, that the Knap- 
sack was placed on the proper shoulders this year. 

Mr. Dornin — A.s we need the next two hours to get ready for 
the evening programme, I now move that we adjourn until to- 
morrow morning at 10 o'clock. 

The President — You will see that there are a number of ex- 
cellent papers to be listened to in the morning, and those mem- 
bers who attend will be entertained. In the afternoon, we have 
our officers to elect, so there will be a full day to-morrow, and 
the meeting will be called to order promptly at the hour to 
which we adjourn, and I hope that every member of the Associa- 
tion will be here on time. That will give you ample time for the 
late hours that you expect to keep this evening, or rather to- 
morrow morning. I trust that every one of you will be present 
at the dinner this evening. 

The Association then adjourned until to-morrow at 10 o'clock 

A. M. 

Second Day, 

San Francisco, Wednesday, February 17th, 1886. 
The President — Gentlemen, we meet again this morning, and 
I am glad to see there are so many who survive. (Laughter.) It 
properly should be recorded in the annals of the proceedings, I 
think, that we met and had a good time, and that we are all here. 
I desire to read a telegram from one of our members who ex- 
pects that he can be with us this evening, but he is going to get 
left. It is dated Suisun. " Put me down for dinner to-night; 
latef or the meeting. A. R. Gunnison/' It is dated from 
So-soon, but I think it will be very late when he gets that dinner. 

The Committee on Losses and Adjustments have each of them 
prepared reports. The Secretary has the report of Mr. W. P. 
Thomas, which he will please read. 

The Secretary — It is unfortunate the gentleman is not here to 
read it himself, but I will do my best. 



Mr. President and Members of the Underwriters' Association of the Pacific: 

Gentlemen — The subject " Losses and Adjustments, ' ; which has been al- 
lotted to this Committee by our President, is one of daily occurrence in the 
annals of tire insurance, causing a steady demand on the capital and assets 
of the companies, indemnifying thousands on all classes of hazards for 
losses incurred, either by carelessness, incendiarism, arson, or other causes, 
notice of which is received either by telegram, the mail or personally, and 
the adjuster goes forward as the sole representative of the company for the 
purpose of investigating the cause of the fire, and adjusting the loss with 
strict impartiality and justice alike to the company and the assured, or pro- 
tecting th^ir interest against the evil designs and fraudulent claims of the 
dishonest claimant. 

One great difference between fire and marine losses is, that in the former, 
the assured, excepting as regards property in warehouses, is almost wholly 
in sole possession of the same, while in the marine branch, it is almost in- 
variably beyond the control of the owner. 

Fires can be traced to many causes, as we have learned, (cause un- 
known, I have generally found it, and I certainly think you will agree with 
me) either by our own investigation or experience, or the knowledge gained 
by others and imparted to us. 

Statistics inform us that for the first six months of 1885, the losses by fire 
to the companies in the State of California exceeded by 60 per cent, those 
for the corresponding months of 1884, while the year 1885 closed with a loss, 
record to the companies on the Pacific Coast of nearly $4,000,000, an alarm- 
ing increase over that of any preceding year, excepting 1875, which included 
the losses in Virginia City, Nevada. 

It is a well known fact a number of fires arise from carelessness that can 
be traced to the lighted cigar or cigarette, thrown thoughtlessly aside; the 
dangerous practice of lighting fires with kerosene; the stick of burning wood 
falling from the stove to the floor; to the rust-eaten stove-pipe; the ash bar- 
rel, or other causes easily traced. It is also a well known fact to the under- 
writer, that at seasons of poor crops, bad prospects and hard times gener- 
ally, fires are far more numerous, with heavier losses, than when every indi- 
cation points to a year of prosperity. 

Does this account for our increase of losses in this State during the year 

Can these be attributed to carelessness, incendiarism or arson? Or, are 
the underwriters to blame for their eagerness to pay some losses of a doubt- 
ful character, with a limited inquiry or investigation as to the cause of the 
fire, leading others who are desirous of disposing of their property to the 
companies (failing in every other manner) to believe that they too may es- 
cape close questioning as to the cause, have a loose investigation made of the 
claim, and receive prompt payment for property destroyed. 


It is generally during the small hours of the morning that the fire is first 
discovered, when the assured is either at home in bed or in the company of 
others in some neighboring saloon, taking good care he shall receive notice 
of the fire from parties he can refer to when questioned as to the cause of 
same, and his whereabouts at that time. Acting on the advice of Mr. Weller 
to his son Sammy, in Pickwick Papers, " Never mind the character, and 
stick to the aileybi. Nothing like a alleybi, Sammy, nothing." 

We have all heard of cases where the assured has been at some distance 
from his home or store in some neighboring town, (another alleybi) anxious- 
ly awaiting and finally receiving the long expected telegram announcing the 
burning of his store that was insured for twice its value. 

A coal oil lamp is left burning in the store or house (and I have heard of 
candles being used), and to the accidental explosion of this the cause is fre- 
quently charged, when in reality it is intentional, or the match may be ap- 
plied either by himself or some one hired for the purpose, either to his own 
or adjoining property, as in the Guerneville fire. The fuse or powder train 
may be fired from some convenient spot, or it may be from "cause unknown" 
to any other than himself, that he succeeds in disposing of his property to 
the companies for a much larger sum, after deducting a large depreciation 
for wear and tear, shop worn goods, etc., and for ready money, than he ever 
expected, or could realize from any other source, and without that thorough 
investigation into the cause of the fire and other features pertaining to the 
claim, which from its very doubtful nature, it should have received. 

In how many cases does the honest loser frequently wait 60 days for the 
payment of his loss, when his dishonest neighbor whose store and stock are 
insured for twice their value, and burned under very suspicious circum- 
stances, comes to San Francisco and effects a settlement for cash down. 

In this connection we desire to quote a few remarks from the letter of a 
local agent, such a good, solid, sensible and interesting local as we are all de- 
sirous of having. He says: "The company have taken no steps toward 

a settlement, and the matter rests as at date of my last advices. Mr. 

draws on his imagination a little in speaking of a poor, ignorant fellow. He 
is a man of considerable experience and knowledge of affairs, and his man- 
ner of handling his claim against the companies has increased my suspicion 
of his connection with an incendiary origin of the fire. It is hardly prob- 
able now that I shall be able to verify my suspicions, still the affair is cloudy 
enough to justify all the delay we can reasonably make; to allow suspected 
parties to collect their claims for insurance too easy, gives too much encour- 
agement to incendiarism. A fire occurred here a few months ago which 
effected a fortunate sale of an old bankrupt stock which was being closed 

out by of your city; the stock was insured for $6,000, and loss adjusted 

at about that figure, and I suppose has since been paid. The suspicious 
origin of this fire, in my opinion, demanded a searching investigation, and 
the adjustment of similar losses without thorough scrutiny, shows unscru- 
pulous owners of unsalable stocks and buildings a profitable way to dispose 


of them. To protect the future interests of our local business, if for no 
other reason, we wish to avoid this." Remarks sensible and to the point. 

We presume you have all heard of the adjuster (one of our members I 
believe), who some years since was called on to adjust a loss that had occur- 
red under very suspicious circumstances. From a very thorough inquiry 
and investigation into the *' cause," he discovered that the assured had 
been trying to dispose of his property at private sale, and failing had tried 
to sell to the company, and had fired the building himself for that purpose, 
but did it in such a bungling manner that it was plainly evident to the ad- 
juster how it was done. He accused the assured, and succeeded in securing 
his policy and receipts for total loss for the consideration of one dollar. 
After his labors were completed, and while waiting for the train, he explained 
to his agent the manner in which the job should have been done to have 
made it not only successful, but to so cover his tracks as to defy detection. 
Some year or two after that, the same adjuster was called to settle another 
loss in the same vicinity, found the assured in this case to be the same 
agent he had so kindly instructed as to the manner of disposing of his 
property to the companies without fear of detection. One remarkable feature 
of the case was, the assured had been trying to dispose of his property 
to private parties and failed. It also, as might be expected, was a case of 
" cause unknown." The company paid a total loss this time, the adjuster 
being unable to discover the cause of the fire, the tracks being so well 
covered. It was a disagreeably cold day for the adjuster, and Snow on the 

It is a remarkable fact that fires occurring from the explosion of coal oil 
lamps or "cause unknown" in uninsured property is infinitely small in com- 
parison to those occurring on insured property, either over-insured or which 
the owner has been unsuccessfully trying to dispose of in other ways. 

To over-insurance can be traced a large portion of our losses, attributed to 
more then one cause. Stocks are allowed to diminish because poor prospects 
does not justify the purchase of but a limited renewal, showing a want of 
thorough investigation not only by the local, but the supervising special 
agent. The insurance is not decreased because a fire may occur, and it is 
better to be over-insured than be held as a co-insurer. It may be a lack of 
knowledge of valuations on the part of the agent accepting the risk. When 
dealing with an applicant who is looking ahead with a view of disposing of 
his stock of shop-worn merchandise or rickety old building, newly painted, 
to some insurance company, having failed to dispose of them in a legitimate 
way, or it may be charged to the avaricious or careless agent who cares but 
little about the interests of his company, as long as he can make his commis- 
sion, and the almighty dollar. 

To whatever cause attributable, the result is certain, and the companies 
are called on to pay a partial or a total loss. 

In the East the three-quarter clause has been suggested, calling forth 
considerable discussion on the subject, and we believe if it were printed in 



all our companies' policies its protection would in a short space of time be 
fully recognized on this Coast. The applicant, knowing that in case of loss 
he could not possibly recover more than three-fourths of the value of the 
property, would not be likely to pay a large premium for over-insurance, 
as is now frequently done, and fires from unknown causes would be less 

To show you that the better class of local agents, the thinking class, who 
desire to protect their companies' interests, are waking up to the evils of 
over-insurance, and the manner in which losses are adjusted and paid by 
some, we quote from another local's letter, which says: "The fire broke 
out in the roof about 4 a. m. The house was occupied by a tenant, who 
applied to me for $700 insurance on her furniture. I declined the risk, and 
she secured a policy for $800 from another office. There can be no question 
of its being an honest loss so far as the owner of the building is concerned — 
she has been residing East for some time. I certainly think that the agent 

of the company, who gave the tenant occupying the building an 

insurance of $800 on furniture costing $350, is deserving of grave censure, 
to say the least. I positively feel that the dwelling would not have been 
burned had there not been over-insurance on the contents. It is not diffi- 
cult, I can assure you, to arrive at a conclusion as to the origin of the fire. 
The company placed the adjustment of this furniture loss in the hands of 
their local agent, who compromised by paying $400. It is the opinion of all 
they need not have paid a dollar. Another instance of the evil of over- 
insurance, which, in my judgment, is one of the most fruitful sources of 
fire." And he might have added, one more instance of the folly of local 
agents adjusting losses, especially where arson is suspected. 

In many cases it is not to be supposed the cause of fire can be ascer- 
tained, even after the most thorough investigation; but the value of property 
destroyed every year from "cause unknown" is so great, that thorough 
investigation in all suspicious losses should be the order of the day. By 
taking up at random one hundred proofs of loss on which claims are paid, 
it is a safe assertion to say that seventy per cent, of them account for the 
fire as "cause unknown," or believed explosion of a coal oil lamp. Terms 
synonymous and doubtful, always carrying with them a doubt and suspicion 
as to the honesty of the loss. We do not claim that every person should be 
believed guilty, but a thorough investigation will not harm the honest loser 
and claimant, and may prove an apparently honest claim one of the worst 
attempts at fraud. 

In the Province of British Columbia, as also in our sister State Nevada, 
they have a law for the express purpose of investigating losses occurriTig 
under suspicious circumstances. We are of the opinion a similar law in 
this State, where losses are so alarmingly increasing and of such doubtful 
character, would prove of incalculable benefit to the companies, and of ma- 
terial assistance to the adjusters; possibly tending to decrease the number 
of "cause unknown" fires and the accidental explosion of coal oil lamps. 


Since the law spoken of has been in force in British Columbia and Nevada, 
"the number of fires have decreased wonderfully, and to-day they will show a 
far smaller percentage of loss to premiums received than any other State or 
Territory of the Pacific Coast. Let us endeavor to pass a similar kw in Cali- 
fornia during the next session of our Legislature. The people have done 
considerable legislation against the companies, now let the companies try 
and protect their capital to this extent. The majority of opponents to such a 
bill or law would be the very class of people who have either been paid doubt- 
ful losses, or feel that under certain circumstances they would not care to 
have a legal investigation of a fire arising in their premises. 

Claimants are either honest or dishonest. The honest claimant, courting 
inquiry and the fullest investigation into all matters pertaining to his loss, 
aiding and assisting the adjuster in every possible way, is not only entitled 
but should receive every consideration from the adjuster, for his actions are 
in entire contradistinction to those of the dishonest claimant. He secures a 
carpenter, honest like himself, to make an estimate on his building, schedules 
his furniture, apparel, and all articles destroyed at figures you know to be as 
near correct as possible; admits its depreciation wear and tear. In loss on 
stock of merchandise, produces his books of account, especially the most fre- 
quently missing — the cash book; does not claim 35 or 40 per cent, profit, 
when his books shows it did not exceed 20 per cent., and every one knew he 
had been selling at cost. He takes good care of stock saved, and produces 
•every dollar's worth of it, gives the cost of each article from an honest trade- 
mark although invoices maybe burned, does not hide the silks, jewelry and 
other portions of his most valuable stock in the bureau drawers of his dwell- 
ing or elsewhere, and claim a total loss from the company because the ad- 
juster fails to discover or learn of their whereabouts; but his every action is 
marked with that open frankness of justice and right that speaks for itself, 
and does one good to see; reposing confidence in the adjuster, feeling confi- 
dent of the honesty of his loss and the justice of his claim. 

On the other hand, the dishonest claimant will take every possible advan- 
tage of the adjuster and the company; will swear to anything to further his 
ends; resort to every subterfuge, trickery and every means in his power in 
his attempts to deceive the adjuster and swindle the company, sometimes 
even attempting to bribe the adjuster to gain his object. These, like the 
honest claimant, are found in all stations of life. 

It has been truly said that no two cases present the same features to the 
adjuster. How necessary then that a thoroughly reliable, painstaking, in- 
vestigating and competent adjuster should be employed, for thousands of 
dollars are entrusted to his care and thoughtfulness. His knowledge and 
experience enable him to protect the interests of his company from the dis. 
honest claimant, and give full justice to the claims of the honest loser. The 
value of the services of an honest and capable adjuster can not be over-esti- 
mated, nor can they be valued by dollars and cents. A careless or incompe- 
tent adjuster can cost his company many thousands and they be none the 
wiser perhaps for years. 


Those who know the worry, care and labor necessary to work out our- 
losses, and the small amount of labor that can be shown on the face of the- 
papers pertaining to same, are fully aware that the adjuster's position is a 
most arduous and responsible one, and his qualifications and resources should 
be unlimited. He should be possessed of a good equable temper, cool and 
collected always, be gentlemanly and polite, ever remembering "a soft answer 
turneth away wrath, " be a good judge of human nature, and not antagonize a 
claimant when he knows that he has an honest loss to deal with, and — while 
adjusting and when paying him a total — should not incur his enmity as an 
adjuster, and his ill-will and influence against the company. He should be 
judge, lawyer, accountant, machinist, manufacturer, carpenter, builder, 
painter, chemist, detective; in fact possess some knowledge of almost every 
profession and trade, as well as a good knowledge of all classes of merchan- 
dise. In fact, the qualifications of an adjuster have been so often written, 
that it seems to us tautology to mention them, and therefore say no more on 
the subject. 

On this Coast where the position of adjuster and special agent is so uni- 
versally combined, every opportunity is afforded the field-man to become 
fairly if not thoroughly acquainted with the risks of his company, so that in 
case of fire, he can refer to his remarks on the risk, whether it be building or 
stock, and they will always prove of great advantage to the adjuster, and fre- 
quently to the assured. 

We, in this paper, shall not refer to appraisements. Mr. Chalmers, in a 
previous paper on losses and adjustments, referred to this most necessary 
proceeding, and whom to select, and we heartily agree with him. We are in- 
formed he has promised the Association an article on the appraisal clause in 
the policies, and the proper wording of the agreement to submit to appraisal, 
and you will receive much valuable information therefrom. 

The apportionment of non-concurrent policies we also refrain from touch- 
ing, the manner having already been decided by this Association in the adop- 
tion of the Kinne Kule, the labor of our President. 

Mr. Winne, of Denver, who so kindly contributed an article on Waiver and 
Estoppel at our List annual meeting, fully covered the ground, and the de- 
cisions of the Supreme Court relating to losses have been so often referred to 
by members of this Association, we make no mention of them; they are on 

We desire in this paper to suggest to our general agents the actual necessity 
for so specifically wording their policies in plain and unmistakeable language, 
and in all cases concurrent, that when the loss does occur, there can be no 
question as to the contract. Policies should be written in expectation, so to 
speak, of the loss occurring immediately. By this practice, much unnecessary 
trouble between the adjuster and the claimant will be avoided, and the appor- 
tionment of non-concurrent policies a labor of the past. 

We do not believe it the best interests of the company, as a rule, to em- 
ploy the local agent to adjust losses; being often in that capacity placed in 


;a very peculiar position, with conflicting interests. There are, however, ex. 
ceptions to this rule, and many a local agent is as capable of adjusting 
losses as the average adjuster sent from the office, leaning neither to one 
side or the other, but pursues his investigations, and adjusts the loss in such 
a manner as to call forth approval of his actions from his office; but, con- 
demned by the citizens of his locality, and frequently with a serious loss in 
dollars and cents to himself, in commission on renewals or new business, he 
would have secured but for the, to him, unfortunate loss and adjustment. 

We have all exper enced the interference of the broker in the settlement 
of losses, and it is a practice that should be sat down on by all adjusters and 
their general agen f s; and we must in this connection say that what is such 
"bad practice in the sometimes ignorant broker, cannot be too highly con- 
demned when indulged in by the disinterested and more enlightened general 
agents and managers. 

To our general agents and managers we respectfully suggest that the 
prompt payment of doubtful and suspicious losses be discountenanced and 
discontinued. Do not place temptation and give encouragement to the dis- 
satisfied property holder, who is likely to fire his property, have his loss ad- 
justed, receive his money before the ink dries on his proof, and skip the 
country before the sun sets. The insuring public are crying out against high 
rates, and the companies with their managers arc complaining about increased 

Of late we have noticed in the payment of some of our city losses, a grow- 
ing tendency to hand the checks and receipts to the broker to be handed by 
him to the assured. This is decidedly a most unbusioess-like proceeding, 
and we think should be discontinued by all. It would be more to the advan- 
tage of all parties concerned if the principals transacted such business direct, 
'without the assistance of the broker. 

Yours respectfully, 


The President — Mr. C. P. Ferry, one of the Committee, has 
burnished a report and requested me to read it. 


Mr, President and Gentlemen: — Six months continuous work in the field 
must be my excuse for sparing you a long article on a subject on which it is 
so difficult to write anything new or original. 

All of you are aware that an adjuster is bcrn, not incubated. You all know 
that he should have the natural keenness of a " Yankee," combined with the 
suavity of a Chesterfield. That he should have the firmness and bravery of 
a tried soldier, and the gentleness of a dove. That he should possess suffi- 
cient knowledge of the law to make him a fair lawyer. That he should be 
conversant enough with machinery and manufacturing to enable him to 


carry on a large manufactory. That he should be possessor of the detective 
geuius of a Pinkerton, the patience of Job, and the honesty of a Quaker. In 
a word, that he should be endowed with the qualities and knowledge which 
would make him successful in any position in life. I say you all know these 
things; because are they not laid down in your books? Are they not set, 
forth in your essays? Theoretically this is the individual that underwriters 
employ to adjust all their losses; but practically, I think, they value too 
lightly these qualifications in the actual adjustment of losses generally. And 
it is only when some tangled skein needs unraveling, or some well known 
hard customer is to be handled, scientificaUy, without gloves, that the skill, 
ful adjuster's services are fully appreciated. That a loss is "small" is often 
the excuse for allowing the local agent to adjust it, or for sending an in- 
experienced person, to save expense. 

Very few losses, however small, are unimportant. The adjustment of its. 
losses determines the character of the company with the assured and the 
public, and has a direct bearing on future losses. A small loss adjusted 
without skillful investigation, may result in encouraging dishonesty, and 
invite a larger one. An incompetent man adjusts a loss, and honestly, 
through, ignorance, does gross injustice to the assured, and the public, 
cognizant of the facts, avenges itself by doing injustice to companies in 
after losses. 

The callow adjuster, never having consulted Webster, or any other au- 
thority, to learn the definition of the word "adjustment," thinks that the 
only thing he is required to keep in view is a "big salvage." If the loss is, 
small and insurance heavy, he contents himself with the reflection that the- 
company will be perfectly satisfied, no matter how ignorantly liberal he has, 
been in his settlement, because he has made a big salvage. 

On the other hand, if the loss is total, beyond question, he thinks he is. 
proving his skill as an adjuster, by squeezing a salvage, be it ever so small 
out of a total loss, not realizing that he is degrading the profession, and 
placing the insurance companies and adjusters on a par with highway rob- 
bers in the estimation of his victim, and giving even honest men an excuse 
for cinching companies in other losses. All companies desire that their 
losses shall be settled so that the assured shall feel that he has been fairly 
treated, and while this is not always possible, the honest, skilled adjuster 
keeps this in view in the adjustment of all honest losses, and no one but an 
adjuster of long experience knows how difficult it is to adjust losses on that 

And he who has seen the most service is the most likely to feel his inabil- 
ity to successfully cope with the difficulties of his profession. Fire insurance- 
being one of the great factors in the world's business, there is no reason why 
it should not have the same standing, and its principal features be understood 
as well at least by the business world as the ordinary transactions in bank- 
ing, but unfortunately for the adjuster, this is not the case. 


When a merchant borrows a sum of money from the bank he carefully 
reads the note which he gives, and knows that when it matures the bank can 
collect the full amount for which it calls. 

If he borrows even a small amount and gives a mortgage, he carefully scru- 
tinizes all the conditions, for he knows they are part of the contract, and that 
he will be held strictly to them; but he makes a contract for ten or twenty 
thousand dollars with an insurance company, it may be covering everything 
he has in the world, and gives as little attention to the matter as though it 
were a transaction of no importance to him, and when the policy is deliv- 
ered to him, throws it into the safe without even a glance. It probably does 
not cover his property as it would if he had given it enough attention to 
simply read the body of the policy, to say nothing of the conditions. 

He violates half a dozen of the plainest conditions of the contract, igno- 
rantly, and when the fire occurs accuses the adjuster of robbing him, be- 
cause though generally construing the contract, he does not pay him a total 

Questions will, from the nature of the business, arise in the adjustment of 
many losses which it is difficult to guard against; but much friction and 
dissatisfaction could be avoided and the tone of the business improved if all 
local agents were posted in matters which they might easily learn, or being 
conversant with them, were not too indifferent or careless to use their knowl- 
edge in assisting to prevent difficulties in adjustments of losses. There are 
many local agents to whom this does not apply, and the adjuster knows them. 
The local agent should educate the assured, but my experience is, that the 
assured is generously educated only through his losses. 

The application is the foundation on which rests the adjustment. If 
when it is taken, the assured was clearly informed in what manner his loss 
would be settled, in case of fire, if he was informed how to arrive at the 
cash value of his property in estimating for his application, if he was told to 
notify the agent of any change in the physical character of his risk or title to 
the same; if he was informed of the necessity of accurately describing the 
property to be insured, and various other matters which will suggest them- 
selves to you; in other words, if there was not such dense ignorance on the 
part of the assured in regard to the insurance contract, there would be less 
prejudice against insurance companies, and the adjustment of losses would 
be more pleasant to the adjuster, and profitable to the companies. 

I know an agent who has carried out the idea of educating his policy hold- 
ders, by printing a leaflet containing all that the assured is required to know 
in regard to his contract, telling it in a brief, clear manner — and I have no 
doubt he will get his reward. The general opinion among the assured is, 
that an insurance policy is a wonderfully abstruse document. 

I think that the more clearly the insurance contract is understood by the 
assured, the less pressure from the public will the adjuster have to resist in 
the adjustment of losses. There is one kind of pressure, however, that is 
difficult to resist, and that is the hungry creditor's influence in favor of 


dishonest claimants. This, I think, could be partly met by referring all clear 
cases of that character to a committee to be appointed by all the companies 
doing business in the State. On the recommendation of this committee, 
of resistance to the claim, the case to be settled only through the courts, 
and expense of litigation shared by all the companies. This would certainly 
-act as a preventive in many cases. Wells, Fargo & Co. never compromis e 
with crime, and suffer very little loss, comparatively, from dishonesty or 
highway robbery. 

There is one feature in regard to adjusting as a profession which you do 
not meet in any other. The adjuster may possess all the qualities that would 
make him rich and honored in any other profession, but he can hope to earn 
"but a very moderate income and little fame as an adjuster, and can better 
his condition only by leaving it for the manager's chair. 

To the older members of this association I have nothing further to offer, 
~but to the younger ones who are just entering the list I would say, if you 
want to get into the front ranks as an adjuster you must learn many things. 
You must study bookkeeping and law, learn to read faces and motives, study 
machinery and tools, the inventions and improvements in processes an d 
manufactures, learn how to handle damaged goods to the best advantage, 
the cost of crude and manufactured articles, study depreciation on goods, 
machinery and personal property generally, learn how to estimate on build- 
ings — in a word, learn everything that time, opportunity, and ability will 
permit. To an adjuster nothing is too unimportant to know. You will find 
in your profession that " knowledge is power." Do not adjust honest losses 
for salvage, but for results. There should be no such word as "salvage" 
used in fire insurance. 

To the manager, who understands his business, you can offer no greater 
compliment than after careful, intelligent investigation, in a series of losses, 
where there is total destruction, you can make no honest so-called " sal- 
vage." It proves that his business is on a sound basis, his inspection and 
management good. When you have an appraisal, stick closely to the ap- 
praisers, when practicable. You will gain much useful knowledge from their 
work. There are other reasons why you should do so which will suggest 
themselves to you. Take no undue advantage of ignorance. Do not de- 
fraud an honest claimant with a dishonest technicality. You will find so 
much dishonesty on the part of many of the assured that it will tend to make 
you suspicious and unjust with all. This you should guard against. In 
many cases you are the jury and judge. Your decision, like theirs, should 
be free from prejudice, just and equitable. 

Yours respectfully, 


The President — The Committee on Losses and Adjustments 
have not yet finished their report. We have yet to hear from 
Mr. A. J. Wetzlar, one of the Committee. 



Mr President and Gentlemen: — The pleasant duty of airing my ideas on 
" Losses and Adjustments " before this Association being assigned me, I will 
spare you the affliction of a lengthy prelude and at once plunge into the sub- 


Some M bright brains " having boldly asserted that ' ' were it not for losses 
there would be no insurance companies," and, therefore, adopting the same 
hypothesis of reasoning, "it is equally true that without losses to insurance 
companies we, as adjusters, would be deprived of our profession." Know- 
ing this to be the case I assert that the Underwriters themselves are in many 
instances responsible for too frequent an occurrence of losses, and that for 
several reasons: 

1st. Few agencies on the Coast, and fewer adjusters, keep anything like 
a properly classified statistical loss record, and those that do hardly ever (if 
ever) during the year compare it with that of their competitors, so that in 
nowise (excepting by a one-sided experieuce) are they intelligently enabled to 
supervise the classification, acceptance, special survey or rejection of risks, 
thereby hazarding the interests of their company and that of their competi- 
tors, by accepting, frequently, risks which, when based on joint experience, 
would be classed as " dangerous unless properly protected," and nine times 
out of ten the result would be likely to show a loss on such hazard during 
the year. Again, where we have Companies who intelligently administer 
their affairs, and see fit to openly and firmly decline "such dangerous hazard, 
unless the necessary protection and changes are made," they are badly handi- 
capped in their business by the action of competitors who are less careful, 
and Mr. Assured, or oftener his "intelligent (?) broker," will say to Mr. 
Underwriter, " Well, if you require us to take down that stovepipe, or to fix 
our furnaces in such a particular way, you need not trouble about making 
out a policy, for we can get one without all that bother, in the ■ Great Hum- 
bug Ins. Co. of Smartville,' " or some kindred institution. What is the re- 
sult ? Mr. Agent, who personally knows Mr. Assured or Mr. Broker to have 
a nice line of business to place besides the risk at offer, is desirous to concili- 
ate the parties and secure their good will for his company, and therefore the 
desired improvement in the actual hazard is left to a promised amendment 
and is never after resurveyed or inspected by a properly qualified employee 
of the Company. 

2nd. A loss occurs in the city of San Francisco. There are twenty com- 
panies interested to a tune of a $100,000. Amount of loss unknown. The 
general agents of the various companies meet to discuss the loss and ar- 
range for its speedy adjustment. Prior to this meeting, General Agent 
u Samuel," or General Agent "Black," desirous of securing for themselves 
an additional advantage over their colleagues in the loss by the possible pros- 
pect of placing the entire line for the assured after the settlement, interview 


Mr. Assured, pat him on the back and condole with him — in some cases going 
even so far as to point out possible damage'by smoke or steam — thereby prej- 
udicing the interests of the insurance companies, and in many cases the 
work of the Adjusters. 

Gentlemen, this is all wrong and certainly in bad taste. Were the same 
class of loss five hundred miles from this city, Messrs. General Agents would 
hold a meeting and designate a Committee of Adjusters to settle it, and not 
interfere or meddle with the loss; whilst here in the city many concerns at- 
tempt to make capital out of losses occurring in large mercantile houses. 
Not only is this the case with regular agents, but in many cases Mr. Broker 
does his utmost to prejudice the assured against the Adjuster by even " dar- 
ing to counsel " the assured, as though an Adjuster for an insurance company 
were a highwayman sent by the corporation to defraud the assured out of his 
honest amount of indemnity. 

Gentlemen, I say the companies themselves are at fault in permitting it; 
in not insisting as dignified corporations should, that no stigma be thrown 
on their actions by Mr. Broker (who never hesitates to receive his com- 
mission from said corporation) being for one instant permitted to counsel the 
assured, where the company duly appoints and employs an intelligent adjus- 
ter to investigate and adjust such loss. Does Mr. Broker pretend to be pos- 
sessed of half the backbone and honor that the adjuster has, who receives the 
full responsibility of determining honestly a corporation's liability under its 
contract of indemnity, and upon whose award the company pays its coin, for 
no matter what amount? Will the company at home pay it on Mr. Broker's 
award ? 

Gentlemen, I say things are at a pretty pass when we ourselves as adjust- 
ers will permit such a state of affairs; and I trust that at this session of our 
Association our President will appoint a committee to draft a memorial to 
the Pacific Insurance Union, asking them to pass a resolution laying an agent 
or broker liable to a heavy fine if convicted of meddling in the settlement of 
a loss which has been assigned to an adjuster. This subject has been much 
harped upon during the year past. My worthy confrere, Mr. Fenn, in his 
able paper of last year referred to it in concise and expressive language; but 
nothing has come of it, and the result has been a quantity of exorbitant 
claims for losses foisted against companies, aided and abetted by the very 
men who imagine themselves underwriters, and seek to make a living in a 
profession which could very well afford to be rid of them. 

3d. As adjusters, we each and all of us pay too little attention to the: 
cause and origin of fires. A conflagration takes place ; one dozen separate 
occupancies are damaged by fire which originated in one of these occupan- 
cies. The proofs of loss of the other eleven sufferers are, in most cases— 
unless the origin of the fire was beyond peradventure established prior to- 
their completion — endorsed, " Cause unknown," or " General conflagration,, 
which originated in No. — so-and-so, from causes unknown," etc. 


Now, in how many instances does Mr. Adjuster, who has No. so-and-so 
(where the fire started), devote sufficient time to a thorough investigation a s 
to the origin of the fire? In most cases, as he probably has an apparent total 
loss, he has so much more work to perform than his confreres — who possibly 
handled damaged stocks — that in order to complete his adjustment as soon 
as theirs and not have his company considered slow or behindhand, he, un- 
less he is fire-tried and experienced, drops the most important part to the 
whole profession, and the result is a bid for rascality. Mr. Claimant, finding 
himself undetected in his wrong-doings, tries it again at some future time, to 
the sorry cost of the companies. Would it not be fairer to all interests con- 
cerned, in general conflagrations, to have the adjusters representing com- 
panies in interest jointly sit as an investigating board, and determine, if pos- 
sible, the origin of such fires? 

4th. A loss occurs on a mercantile stock. The current commission clause 
has been duly inserted in the policy, and Mr. Claimant, in presenting his 
loss, lays claim for indemnity on everything in stock, whether his own or 
consigned to him. Mr. Adjuster, in the investigation of the loss, finds that 
the assured is in no wise legally responsible to the consignor for the goods 
destroyed by the fire, yet is met by the assured with the confident produc- 
tion and designation of that commission clause in his policy, to wit: "his 
own, or held by him in trust or on commission;" and with the additional 
assertion that whilst he, the claimant, will admit no legal liability exists 
towards his reimbursing the consignor, yet his actual business interests com- 
pel him, in order to continue the handling of the said consignor's goods, that 
he make good to such consignor the amount of loss sustained, and it was 
with that very end in view, and for such very purpose that he had inserted 
said commission clause in his said policy. 

Will any of our companies, with such a clause in their policies, undertake 
to fight such a claim in Court? I am afraid, gentlemen, it would prove a 
hazardous undertaking before a jury, all decisions bearing on this point to 
the contrary notwithstanding. I know of a case in point where the assured 
recovered quite an amount for such consigned goods from the companies, 
and up to date has failed to reimburse the consignors, who, as I understand, 
are about to bring suit against said consignee for the recovery of such amount 
as he recovered. 

This subject is of so wide a range that I have not the space and time to de- 
vote to it here, so can only refer to it briefly, especially as I have been in- 
formed that the subject is to be fully handled by one member of our Asso- 
ciation at this meeting. You easily perceive what a door is open for fraudu- 
lent claims, and I trust every company will insist upon adding, after the^ 
words "on commission," the words 'for which he (or they) may be legally 
liable." Reverting now to the 


I proudly say that perhaps no profession in the world contains more men. 
of rare ability and business experience, nor has more responsibility attached 


to it, than that of the adjuster. There is, possibly, no other profession in 
the world that requires the combined qualifications of an underwriter, attor- 
ney, merchant, architect, expert book-keeper, and detective, as ours does, 
whilst at the same time we are required to be keen judges of human nature, 
diplomats, quick of perception, quick and firm in our decisions and honest in 
our judgments. Losing sight of the individual and company, we must 
calmly proceed with unruffled tempers — no matter how strongly provoked — 
to dispassionately and as accurately as possible, determine the amount of lia- 
bility of the insurer and responsibility of the insured, so that the insured 
shall receive full indemnity under the conditions of the contract, and the 
insurer shall not contribute more than the equitable proportion for which he 
would be liable. 

This at all times requires a careful investigation, and oftentimes the same 
proves very complicated. Yet I notice with regret that there are many com- 
panies who seem to be desirous of avoiding the expense of such investiga- 
tions, partially through ignorance of the requirements of an adjustment, and 
in some cases due to the fact that agents here, by their contracts with 
home offices, in consideration of an increased commission paid to them, have 
agreed to pay all expenses of agency, including the necessary expense attend- 
ing the adjustment of losses, and they are therefore desirous of cutting that 
item down as small as possible, whilst they lose entire sight of the fact that 
their company's interests suffer through their mistaken and selfish idea of 
economy. There is not an adjuster here but who has in the year just past 
been thrown in with clerks and city or local agents in the settlement of 
losses where several companies were interested, and the results have not 
only been an increase of labor to the said adjuster, but on several occasions 
good adjustments were nearly spoiled, and certainly materially affected by 
the inexperience of one of these clerks, city or local agents. It is true that 
at one of our Association meetings we passed a resolution intended to cover 
this very point, which would permit an adjuster to withhold his figures on a 
loss from any but a regular confrere, unless duly paid for his services. Still I 
declare, gentlemen, that there are but few of us in a position to dare to an. 
tagonize any one general agent, and oftentimes, therefore, the adjusters are 
compelled to good-naturedly grin and bear such imposition. There are none 
of us but have found that after a careful investigation of a supposed and ap- 
parently total toss, handsome salvages have been made for the companies, 
and the assured has been fuliy and satisfactorily indemnified, whilst there 
are none of us but can point with pride to the vast sums of money we have 
saved our companies through thorough and careful investigation of exorbi- 
tant or fraudulent claims. And yet agents and companies will growl at the 
compensation paid to the adjusters on this Coast, this the most comfortless 
and hardest department in the United States, and all for what? Is a profes- 
sional man of brains to be compensated on the basis of the possible gain or 
loss of a general agency; or more yet, through poor management of such gen- 
eral agency, and the consequent growl of the home office at the large expense 


account? Is the adjusters' department the proper one to strike at and strive 
to reduce their compensation, thereby compelling such men of brains to seek 
professions where services are duly compensated on the principle of the "la- 
borer being worthy of his hire ?" Does an attorney-at-law commonly charge 
for advice by the day ? I think, gentlemen, this is entirely wrong, for the 
amount of a loss should cut no figure in any adjuster's charges; and yet I 
have heard agents say where a loss was settled, we'll say for fifty dollars and 
the expense and per diem bill was $69, "why goodness, me, the whole loss is 
only fifty dollars!" thereby proviDg instantaneously that the fact of the effi- 
cient service of the experienced adjuster was entirely lost sight of, though 
perhaps it was his very efforts that saved the company thousands of dollars 
by reason of the detection of a fraudulent claim or non-liability under their 
contract. Again, there are companies who are constantly desirous of making 
hasty settlements for the sake of making capital against competitors, and 
this very action does more to throw disrepute and injury on the profession 
than any other, as it handicaps the competent and careful adjuster in a thor- 
ough examination of damages where the loss cases are contiguous. 

Reverting now from this proposition to the adjustment under non-concur- 
rent policies, I think our Association can justly feel proud of the reputation 
and success it achieved and the stir it created in Eastern underwriters' circles 
with its '• Kinne " and its " Sexton " rules, either of which are more accurate 
and fair than the Reading Rules, Finn, Albany, English, Continental, or the 
other five rules so far in existence. Yet I believe that one part of even this 
intricate proposition is in a fair way of being settled, if as an Association we 
would adopt Mr: Z. P. Clark's rule of apportioning a loss between Blanket 
and Specific policies, the sole object of his rule being to discountenance the 
issuance of such Blanket policies. He therefore suggests the contribution of 
the Blanket policy at their face, with the Specific policy to smallest item of 
loss so specifically insured, proceeding thence with the residue of the Blanket 
policy to contribute with the Specific policy on the next larger item of loss 
so specifically insured, and so on until the loss, to the extent of the policy on 
each item, is fully paid, or the Blanket policy exhausted. 

The several large losses on mercantile stocks in this city last fall, have 
more forcibly proven to most of us that, if it should come to a severe damage 
loss on certain classes of goods, we would undoubtedly be compelled to send 
East for a competent expert to act as appraiser for our companies, as there 
seems to be no one on this Coast who is not, perforce of circumstances, hand 
and glove with the few houses engaged in the importation of these certain 
class of goods. And right here I would suggest that the Secretary of this 
Association be requested to procure a book and keep therein a record of the 
addresses of various competent experts who have been " tried in the balance 
and found not wanting," and that we make it our duty to furnish the Secre- 
tary with the names of such experts, the said book to be open only to the in- 
spection of the members of this Association. 

I have also noticed a desire, on the part of some agents, to form combina- 
tions in the appointment of committees of adjusters for the settlement of 


several losses, these committees being desired to work for the benefit of all 
companies concerned, without compensation other than that of the salary 
they receive from their own company. Upon what hypothesis of reasoning 
these gentlemen think they are entitled to ask the services of another com- 
pany's employee or officer without compensating him, I have been unable to 
decipher. I feel that any company or agency that cannot afford to duly com- 
pensate a competent representative had better retire from the insurance 

There is another point I desire to call this Association's attention to, and 
that is the practice of some adjusters in representing or counseling claimants 
against other companies. Nothing is more reprehensible to my mind than 
the effort of arguing on one side of a question for principle one day, and the 
opposite side of the question and against the very principles upon which 
insurance rests, the next day; and I trust that the Association will promul- 
gate a resolution to the effect that any member convicted of such a charge, 
after full investigation at a special meeting of this Association, shall be ex- 
pelled from membership. 

Time, and no doubt your patience, will not permit my transgressing longer 
upon it, though there are many things which, as I write, occur to me to require 
attention. Knowing this, I have not sought to exhaust your kind interests 
by a dissertation oi" legal problems and knotty propositions with long quota- 
tions and legal references attached, for we each get enough of these things 
daily. Yet if, in plainly calling attention to some of the evils with which we 
have to combat, I shall be successful in causing even but one reform, I shall 
feel amply satisfied and compensated by your kind attention. Thanking you 
for the same, I have the honor to subscribe myself, 

Respectfully yours, etc., A. J. WETZLAR. 

San Francisco, Cal., February 16th, 1886. 

The President — I am very glad to see that the three members 
of the Committee on Losses and Adjustments have performed 
the duty assigned to them so thoroughly. There is no question 
but that our Association finds some meaty parts in these reports, 
pertinent to the matter of losses and adjustments; and the sug- 
gestions on the subject, while treated of in the : same general 
way, have the peculiarity of thought of the several gentlemen 
giving a different expression of ideas. Mr. Wetzlar is the only 
one that made any suggestions to bring before the Asssociation, 
and it might be of advantage to discuss them, as to whether we 
can adopt them or not. In his paper he referred to the matter 
of brokers, and particularly in San Francisco, having to do with 
adjustments of losses. The paper on " The Broker as a Claim 
Agent," by Mr. Watt, would naturally follow, and it is so laid 


down in the programme. I will ask Mr. Watt to tell us what 
he has to say on that subject. 

Mr. E. V. Watt — If this paper is not in accord with the opin- 
ions of the gentlemen present, I cannot help it. It has been 
prepared at the suggestion of our worthy President. 


The very title seems to me opprobrious. I dislike it very much. I suppose 
the real subject of which I am to write would be more properly called ■ ' The 
Eelation of Brokers in the Settlement of Losses in San Francisco,'' and with 
that view I undertake the task, not wishing to shirk the first labor laid on 
me by this Association. 

Mr. Fenn, in his very able article on Losses and Adjustments, read before 
this Association last year, said: * * * "Brokers in the city— at least some 
•of them— have a habit of interfering in adjustments. They tender their ad- 
vice unsolicited, to both sides, indiscriminately; block progress by their ill- 
timed action, and frequently prejudice the case of the assured. If their ad- 
vice is asked no one objects to their giving it; but let them keep away from 
any active part in the adjustment. Their participation is indelicate and their 
own good sense should teach them this. Anxiety to plead the cause of their 
client often leads them to such extremes as to weaken the cause they advo- 

Discussion on the points of the paper was invited. After the older members 
of the Association had spoken I ventured to call attention to the above 
quoted remarks, and said: "We, every one of us, have in our policies, a 
clause which says, * Any person who may have procured this insurance shall 
be deemed to be the agent of the assured,' and it seems to me that if a person 
is the agent of the assured in procuring the insurance, he should be the as- 
sured's representative in case of loss. Nine times out of ten, unless a man 
has passed through the experience once, when he comes to have a loss he 
don't know what to do. He thinks, as in case of death, nothing must be dis. 
turbed until the Coroner (the adjuster) comes, instead of commencing at 
once to save the property, as he should. He has never read over the printed 
conditions and requirements of the policy, and would have to study them a 
week or two to find out what he should do. So it seems to me no more than 
fair that the broker should step in and act as the agent of assured, and help 
him out." 

These quotations will show plainly why this subject, and in this form, was 
assigned to me. It comes as a sort of punishment for my temerity in taking 
issue with those whose vocations lead them to look with disfavor on any- 
thing that will oppose them in their easy settlements. I accept my chastise- 
ment and will now do penance. 


Mr. Fenn was right in the main. Indiscriminate and unsolicited adVice 
from any person, be he broker or friend, is not only annoying, but is damag- 
ing. Damaging to assured because it provokes the adjuster and makes him 
ready to take any and every advantage. It should be borne in mind, how- 
ever, that the public insures for indemnity. The benevolent idea of increas- 
ing the dividend of the stockholders of insurance companies never enters his 
mind. On the other hand, the adjuster knows the less the losses paid the 
greater the dividends; and years of experience only serve to sink this idea 
into his mind deeper and deeper. His interests are so diverse from those of 
the assured that it is not strange differences arise. 

Ordinarily the assured is "at sea" when a loss occurs. He has had no 
experience; but soon the adjuster arrives; he, on the contrary, has had 
large experience, and he immediately and very kindly tells the assured 
w r hat to do. Evil men have circulated slanderous stories about insurance 
men in general, and the ordinary man who has a fire is as suspicious of 
the adjuster as he can well be. He doubts his honesty and good faith; 
he has trusted his insurance business to some friend — a broker who is 
constantly dealing in insurance. He does not know the company he is 
insured in, much less the conditions of the policy. How natural it is 
that he should turn to this man for advice. What impropriety can there 
be in the broker advising him ? 

It was said here last year, "There are brokers and brokers." True; and 
there are "Adjusters and adjusters." To prove the latter assertion, I need 
but refer you to the minutes of past sessions of this Association, where I 
find that the actions of some adjusters have been severely criticised. 

Many brokers, so-called, have no correct idea of our business — they can- 
not tell what constitutes a non-concurrency or a violation of warranty; they 
know less about what should be done in case of loss than does the assured, 
and it is this class to whom objection is made — they are usually the mischief- 
makers— they are loud-mouthed and troublesome, but no broker who under- 
stands his business — the insurance contract, its terms, conditions and re- 
quirements, and who possesses the other qualifications usually found where 
common sense reigns, will ever injure the cause he advocates if the adjuster 
be a fair-minded man. 

Mr. Fenn properly called the assured the client of the broker, thus admit- 
ting the right of the broker to aid and advise. 

A condition of the policy is, that in case the assured and the adjuster or 
company do not agree as to the damage to a building or stock, disinter- 
ested appraisers shall be employed, the company and the assured dividing the 
expense; but we all know that certain men do little else than appraise losses 
for the insurance companies. Can we say these men are disinterested ? They 
are good men, but they work for the companies and are paid by the com- 
panies; and the adjuster advises his appraiser, privately and publicly, how 
to proceed, never omitting in his private instructions the most favorable 
points for the company. 


A case was cited here last year as illustrating the baneful interference on the 
part of brokers. The settlement of the loss was progressing satisfactorily (to 
the adjuster at least), when the broker who had placed the business stepped 
on the scene, and said to the assured: " That building was worth so much; 
you could not rebuild it short of so-and-so." Then he said to the apprais- 
ers: "You could not rebuild that building short of so-and-so; it is a terrible 
loss — a terrible loss!" * * * That man got fifty per cent, more than the 
building was worth, just through this interference. 

Now I suspect that the assured's appraiser out-figured the companies' ap" 
praiser, and thus the loss was determined to be greater than the adjuster 
thought it should have been. The fact probably was that one man was figur- 
ing for the company and one for the assured. Both were interested — not 
disinterested, and if the company's appraiser's thought the sum demanded by 
the assured's man too high, why did he not call in the third man? The 
broker had nothing to do with that settlement. 

Some one said, "it is our intention to try to see that the assured gets jus- 
tice, as well as to see that the company does not suffer from fraud." 

11 No man can serve two masters." The adjuster works for the companies 
and not for the assured. The broker works for the assured and not for the 
companies. I am of the opinion that the better class of brokers take as 
much pains to see that the contract between their client and the company is 
equitable, as do the better class of adjusters, that the assured shall have 
•' fair play " in case of loss. 

Dishonesty is reprehensible, whether found in adjuster, broker or assured 
but I assume that taking the three classes, each is as honorable as the 
other. I believe that the broker is as honest in his purposes as the adjuster 
and when we admit that the overzeaious broker often annoys us and causes 
trouble, we cannot deny that the same traits displayed by the adjuster are 
just as annoying to the assured. 

Will you bear with me while I review a case or two given last year as ex- 
amples of the disastrous effects of this inexcusable interference of brokers? 

"A fire occurred near a pipe — the plastering was torn away and the dam- 
age was rive or gix dollars. "But," says the adjuster, "I satisfied the assured 
there was no loss." The next day, the broker came round and said, "why 
don't you pay that man the loss." The adjuster replied, "The man didn't 
claim any loss." * * * "I had to pay that man the loss," he says, "sim- 
ply because the broker told him he could have that money to fix the flue." 

This is the statement — there was a loss, the assured was convinced 
by the adjuster that there was no loss, and again by the broker that there 
was a loss, and the loss was very properly paid. The broker was fully justi- 
fied in his position. The adjuster admits the claim, and the justness of it, 
when he says "I had to pay that man the loss" — the amount cuts no figure. 
A case was mentioned where a broker said to an officer of a company, "I 
am placing large lines of business with you, if you do not treat this man 
J*ight I'll take my business away from you." Probably in this case the com- 


pany were holding off on some trivial ground, and needed just such talk. If, 
however, it was a threat in advance of any indication as to what the com- 
pany's action would be, it was indeed indelicate, in fact, unmanly and inex- 
cusable, unless past experience had awakened his suspicions. 

The broker is the proper person to advise the assured. By our own con- 
tract we make him the agent of the assured. 

I will admit it is always more agreeable to have things our own way, and 
we are usually displeased with the man who interferes with our ease and 

When the adjuster calls round the morning after the fire, he speaks some, 
comforting words to the loser, assures him that all will be settled quickly 
and fairly (which is a fact), but Mr. Broker drops in, produces the policy, 
the construction of which has probably cost him some thought and care, and 
says to the adjuster, " Here is our contract, I took considerable pains ta 
have it correct when it was entered into, and now we will settle this loss ac- 
cording to its terms. 

The broker would not permit such a thing as I heard occurred in New York 
(of course it could not have happened in Oakland). The building was valued 
at $2,000, and insured for $1,000; it burned, leaving the side walls stand- 
ing. A competent builder said the standing walls were worth $400. The 
adjuster deducted this amount from the $1,000 as salvage, and paid the 
assured $600, stating that that was according to the contract. 

The broker should advise and protect the assured. There is no use for 
him in the business unless it is that he should represent the assured. 
There is no more reason that the brokers, as a class, should be discredited 
because some are ignorant or unscrupulous, than that lawyers should bo 
condemned because there are demagogues, or doctors because there are- 
quacks, or preachers because there are impostors. 

Some adjusters are honest, some are dishonest; some are bright, others are 

Some brokers are trustworthy, some are rascals, some are intelligent, and 
others are ignorant. 

I cannot close this paper without saying that I fully appreciate the work of 
an adjuster; it is second to none in its importance, and requires as much 
skill as any branch of the business; the trials are numerous, the vexations 
endless and the rewards few. 

If by this paper any may be led to treat these agents of the assured with 
the respect due them, and to accept the inevitable with a grace, I wilL 
consider my reward complete. 

An old adjuster, speaking of this subject to me, said that he usually tried 
to measure the broker interested in any loss he was adjusting. If he found 
him really bright and honest he could always get some work out of him; if, 
on the other hand, he was ignorant and troublesome, he would use all his 
tact to win him over to his ideas, and usually succeeded. 

If, however, reason and kindness will not prevail, and the broker remains 

obdurate, my advice is to fire, him bodily. 



The President — I am very much pleased with the shape that 
this discussion has taken, and I think, as I remarked in my ad- 
dress, that perhaps as individuals, we are apt to become too 
much of specialists at times. We listen to each other, and pat 
each other on the back, and think there is no one like adjusters, 
yet at the same time there are other interests that have always 
to be considered. We want a certain amount of breadth of 
thought and action, without superficiality, and it is only by our 
meeting together, as we do at our monthly meetings, that we can 
attain to the desirable end which we all hope to arrive at some- 
time or other. 

There is an important standing committee, that is in our pro- 
gramme, in accordance with our regulations. I will now call for 
ideas on Legislation and Taxation. Mr. A. D. Smith's name 
appears first on the list, and we shall be pleased to hear from 


To the Underwriters' Association of the Pacific — "Legislation and Taxation" 
having been the subject of a paper prepared by the undersigned, and read 
before the Association at its session of 1882, your committeeman cannot but 
feel that our honored President has fallen into a grievous error in again as- 
signing him to the same topic, for, although the scope of the subject is very 
broad and is susceptible of as many modes of treatment as there are individ- 
uals, still a second monograph on the one topic can hardly be expected to 
offer much that is new. 

Wholesome legislation is not objectionable to insurance companies, and 
they recognize the right of communities to impose upon all classes of wealth 
their proportion of the legitimate expenses of government. Beyond this 
limit, legislation which, as legislation goes, means nothing but taxation, is 
the bane of our business. 

It is assumed that insurance companies seek only what is just and right. 
None but the wholly depraved and irreclaimable will, for a moment, assert 
such assumption to be in the least strained. It is the aim of our profession 
to afford indemnity, and out of the business resulting, to obtain a profit 
that shall be a reasonable compensation for the risk undertaken. Each dol- 
lar of insurance capital has the same interest in the business as every other 

At the present time the amount of capital interested in fire insurance on 
this Coast, aggregates upward of three hundred millions of dollars, and there 
are engaged in the business, endeavoring to make their living from it, upward 
of four thousand persons in California and the adjacent States and Territories. 


— a powerful influence for good or for evil. With the same end in view, 
with the same interests at stake, and with the powerful influence of numbers 
and wealth — why should there be legislation adverse to our interests ? 

The cause of our trouble lies all within ourselves. We alone are in fault. 
Selfishness is the rock whereon we meet with our discomfitures. Each of us 
is striving to obtain some advantage at the expense of our neighbors. Thus 
divided, thus wrangling among ourselves, is it at all strange that we all also 
become the prey of scheming lobbyists and legislators ? 

What is the remedy? Simply to forego our own selfish motives and unite 
for the common good. Then let us devoutly pray for the speedy coming of 
that period when the aggressive British Lion (Dornin's) shall lie down with 
the innocent German lamb, and a little Yankee child shall lead them to where 
the California bear and the New Zealand kangaroo playfully gambol in broth- 
erly love. 

Respectfully submitted, 


The President — We have the name of Mr. W. J. Landers on 
the Committee. I do not see him present. 

Mr. Sexton — Mr. Chairman, I would suggest here that in re- 
gard to Legislation and Taxation, that we should educate our 
agents in all parts of the State to see that we get good, decent, 
honest men for legislators, who will understand this subject, and 
it will simplify this matter a great deal. 

Mr. Smith— Mr. Chairman, I wish to call your attention to the 
fact that in a paper read by me in 1882, I referred to that very 
subject, calling on insurance men to pay attention to this sub- 
ject, and see that we get good men for the Legislature. 

The President — I think the more we talk about these things, 
the better it is, and the more probability there is of something 
coming from our Association. It is a very important subject, 
one requiring time and thoughtful attention. That is the reason 
why I placed such men as Mr. Smith and Mr. Mitchell on that 
Committee. They are here all the time, and occupy easy chairs 
in their back offices. They do not have to go out in the country 
as do Mr. Thomas, Mr. Ferry, and Mr. Wetzlar, whom I placed 
on the Committee of Losses and Adjustments. I tried to select 
these Committees a year ago, for the work they have to do, and 
that it would be for our advantage to listen to them at this time. 

I have now to ask Mr. Mitchell to say a word on 



Mr. President and Gentlemen of the Fire Underwriters' Association of the 
Pacific — This member of your "Committee oq Taxation and Legislation'* 
was Chairman of the same committee two years ago, and at our annual meet- 
ing at that time read about the usual argumentative paper on that subject, 
and why you, Mr. President, should have placed him on the same committee 
this year is past finding out. This question of legislation, as it is presented 
to the underwriter by the average legislator, almost every day in the year, 
has become so perfectly absurd and ridiculous that the most acceptable and 
gratifying paper that this member of your "Committee on Legislation " can 
offer is simply the plain statement that the Legislature of our State is not in 
session. Gentlemen, argument is now out of the question — it is useless* 
The future safety of our business lies in prompt and decided action and less 

One grand united action on our part, to make the policyholder fully under* 
stand that any addititional taxation or increase of the fire hazard by any 
legislation, must come out of his individual pocket, is worth more in defeat- 
ing obnoxious legislation and taxation than all the arguments the ablest com- 
mittee of underwriters can produce. For example, take the recent case where 
the Supervisors of one of our California counties passed an ordinance re- 
quiring every company doing business in that county, to pay a special license 
equal to about 10 per cent, of the premium income in said county. Before 
final passage of the ordinance, the local and special agents fully .presented our 
side of the question to the Supervisors, but to no purpose; the ordinance be- 
came a law. The underwriters said, "Very good; we will pay the license, and 
add 10 per cent, tax, in addition to the tariff rate, on all risks in your coun- 
ty." The policyholder, finding that he, and not the company, had to pay this 
tax, then interviewed Mr. Supervisor, and the result, as you all know, was 
the immediate repeal of the ordinance. This united action in adding 10 per 
cent, additional to the tariff brought about a result which could not have 
been reached in any other manner. 

Take also, for instance, our neighboring State that imposes a license equal 
to 5 per cent, on the premium income of that State. The underwriters, by- 
adding a corresponding tax of 5 per cent, in addition to the tariff rate, will 
either secure the repeal of said State license, or the policyholder will have to 
foot the bill until such time as it is repealed. Arizona Territory should be- 
treated in the same manner, and if Washington Territory imposes a tax of 
3 per cent, on premiums, as now proposed, let the underwriter add the same? 
in addition to the tariff rate. It will soon have its effect. 

Certainly this same line of action can be carried to such an extent as to* 
also reach the valued policy bill, we think, with even better results than 
have been reached in the case of the Territory of Idaho, where the under- 
writer refuses to write on buildings, or in the case of New Hampshire, 
where the companies have withdrawn altogether. This can be accomplished 


by simply saying to the property owner, "Your legislature has imposed on the 
underwriter the valued policy law, whereby we think the fire hazard has in- 
creased, say 100 per cent, more than it was before said valued policy bill 
became a law; consequently, if you desire a policy of insurance, it will cost 
you just 100 per cent, more than it would have cost had said valued policy 
bill not become a law, and if we find the 100 per cent, additional to the pre- 
mium income is not adequate to the increased loss ratio, we can increase it, 
say 200 per cent.," which action we think would cause the policyholder to 
do some very effective work with the representative from his district to secure 
the repeal of any or all laws which have the tendency to increase the cost of 
his insurance over and above the original tariff rate. 

This member of your Committee would like to see this line of action car- 
ried out in the very next State of our Union that passes the valued policy 
bill in any shape. We think it would have the desired effect. 


The President — It is very evident that the President did not 
make any mistake in appointing the members for the Committee 
on this topic. I believe, speaking for a moment, if I may be 
pardoned, that the fact that the Legislature is not now in session 
is one of the reasons why we should begin to work for the pur- 
poses we have in view. If we know. in advance what we have to 
fight we can prepare our defense — we know where to meet the 
enemy and what strength they have; we can then plan our de- 
fense. And it is just such events as those that have been out- 
lined by Mr. Mitchell that are worthy of our consideration. We 
never know what we have to meet until it is produced, and the 
reason I put these gentlemen on the Committee is that they 
having handled the subject once, they would give us more than 
might be accomplished by new members starting in de novo. 
They are continuing a subject familiar to them. I do not offer 
any apology for putting them on, but give my reasons. I do 
not think there is any necessity for an apology. 

Now, we all feel that without business there would be no in- 
surance companies, and without the local agents there would be 
no business. They have some peculiar ideas and experiences 
as local agents, which are as foreign to the manager, adjuster, 
or special, as ours are to the local agent. Tou will, I think, agree 
with me that none of them are more fertile in thought and ex- 
pression of ideas than Mr. Bruce B. Lee, the genial agent at Ked 
Bluff, and I asked him to prepare a paper. He has done so, and 


it is put in the hands of Mr. Staples, who will kindly read The 
Experiences of a Local Agent. 

Mr. J. W. Staples — I will simply say that Mr. Lee wrote a 
letter to me, saying that the President had humbugged him into 
writing a letter to this Association, and one condition was that 
on writing it, it would be read at the annual meeting, and he 
therefore asked me to take charge of the paper and read it, and 
I do so. It is addressed to the Association, and says: 


Mr. President, and Gentlemen of the Underwriters' Association of the Pa- 
cific: — A year of struggle for premiums — a twelve month of earnest endeavor 
to make a profit out of a questionable possibility, has passed. The books 
have been balanced, and the annual account rendered. The Almighty Father, 
who " tempers the wind to the shorn lamb," and who ought to have an " all- 
seeing eye " to the eternal fitness of things, for some strange and unfathom- 
able reason, permits us to live — to individually and collectively move on in 
the same old rut; to commence another year of fire and trouble upon an ig- 
norant, but not altogether confiding public. The same miserable and dis- 
honest system is still in force. Managers and agents are still bribed by a 
commission to over-insure and thus corrupt the assured. The waning for- 
tunes of many an ill-managed house will be restored, by a timely fire and a 
live insurance agent hunting for a fat commission. 

The fire waste has been reduced about ten million dollars, which I attrib- 
ute partly to good luck^ and partly to my plain letter to you one year ago. 
(Subdued applause.) Great strides of progress have been made in every 
branch of industry — in the arts and sciences — in commerce and trade. But 
the insurance business has taken but one little step in advance. A noble 
-compact has been formed, its intricate machinery put in motion, and rates 
have been equalized (the dear public say, raised), that is all. 

One man stands solitary and alone — tired, wearied and worn — the only 
man in all the insurance profession who has ignored self and labored earn- 
estly and honestly to do the right— to bring order out of chaos. To Alfred 
•Stillman, manager of the Pacific Insurance Union, I can alone say, "Well 
done, good and faithful." 

As to the balance of us, why ! Oh why ! Divine Kuler of all, do you per- 
mit us to live, and wrangle, and backbite, and lie, and stop the wheels of 
•every reform, until we can each figure up what there is in it for our little in- 
finitesimal selves ? Why permit us to sacrifice the grand possibilities of the 
future for the petty profits of to-day ? 

If nothing noble or good is to come out of this insurance fraternity, if only 
confidence men and scalawags are to be bred in the local field— if the fires 


are still to burn on the altar of over-insurance, and all the corrupting influ" 
ences of a false system are still to have full sway, I can only pray for some 
avenging nemesis to wipe us out of existence and proclaim us to posterity a 
generation of imbeciles. I ask myself, I ask you, why can't we be 


The old, old river, has run smoothly, serenely, on through all the centuries, 

and it is yet a noble stream; has withstood the jeers and scoffs of every 
scoundrel who has been permitted to walk in God's bright sunshine since the 
days of old Adam. And till yet, and for all time to come, will it continue to 
roll on in quiet grandeur, and in letters of burnished gold, flashing from its- 
bosom the old, old story, 


And why not ? Go back for ages, and carefully study the history, the 
craft and cunning of every great rascal. Note his brilliant success, and 
finally his utter defeat, when at the end he comes groveling in poverty and 
disgrace, to the bar of public opinion. Deep into his soul, letter by letter, is 
the old adage burned. Syllable by syllable falls from his driveling lips, that 
grandest of all human epigrams, "Honesty is the best policy." 

Look at the history of crime, and our only conclusion is that there is no 
profit in it. Read the history of embezzlement and breach of trust, and our 
only summing up is that it don't pay. Reason and wrestle with our everyday- 
practices, our petty deceits, our little subterfuges, our false reasoning, false 
showings, false colors, and what is it, and why do we do it? Simply to bead 
off the other fellow, and because there is nothing in it, and it don't pay. We- 
lie, and we uphold a liar. When a great business truth is presented to us, 
we call it a pernicious doctrine, and we labor and flounder and do our best to 
strangle the thing that does not agree with our little, puny, accepted order of 

Why not be honest? Why not be men, and give vent to the faith that is 
in us? Why not act, when we see the right? Here we stand in the ranks of 
the noblest profession on earth. Insurance is the great financial problem in 
the world's history. Towering above all the kingdoms, all the governments. 
built up by progress, culture and education, standing more solid and endur- 
ing, the foundation of all commercial enterprise, of all wealth, the great in- 
surance companies are absolutely alone in their greatness. 

And what do we do? Drag the profession in the gutter, besmear the name 
with filth. And why? Because scoffers that we are, we will not remember 
that honesty is the best policy. Our local agents are not selected with any 
reference to their ability or opportunity, or freedom from the cares of other 
pursuits, to make skilled underwriters. ' ; Get business — get business — and 
his Satanic majesty take the rear rank," is the injunction. Every manager 
and general agent knows that his local agent ought to be the best business 
man in every community, thoroughly posted on the moral hazarJ, and en- 
tirely competent to judge of the physical. If he gives each risk careful at* 


tention on these two points, the laws of general average will show the meas- 
ure of his profit. 

We all know that specials are born, not made. To be a special embodies 
all the qualifications requisite for a successful general, a finished organizer,, 
a subtle, far-seeing politician. Wm. C. Kalston would have made a first-class 
special. He is dead now, and I have no other in mind. 

We struggle and fight against the valued policy law. And why? Simply 
because it is honest. We take the premium for a thousand dollars. Why 
not square the contract with our practice, and pay the money when the fire 
comes? If the property is only worth $750, whose fault is it? The agent 
who advised the risk, and not the assured. Kick out the agent and get a 
better one is your remedy. 

The local agents put their heads together and solved the problem of 
"What's the matter?" in very short order. Too many agents — too much 
competition. How will you abate the nuisance and remedy the evil? Grad- 
ually, and by a system of graded commissions. The first point to ascertain 
is the value of an agent's services. It can only be arrived at by the amount 
of premiums. Tho agent who collects $1,000 per annum cannot afford to 
devote much time to the study of insurance; cannot, from the few losses he 
has, acquire much experience. He is not worth more than 10 per cent. The 
agent who does a business of $5,000 per annum is worth 15 per cent., for the 
simple reason that he must devote a good part of his time to insurance, must 
learn, must keep up with the times, must be worth the extra pay. The 
agent with $10,000 premiums makes his living by insurance. He must de- 
vote his whole time to the business, and must become a skilled underwriter; 
must be correct in all his practices, and efficient in all details, or a vacancy 
will occur, and his occupation be gone. "But," says a local, "some agents 
with $30,000 are careless and unreliable, and cost their companies much 
money, much anxiety. Some of the largest have proved to be of the least 
profit. How will you correct that ? " By the organization of a local union, 
whose object shall be to teach correct practices, maintain a standard of excel- 
lence, and assist the compact in enforcing a healthy, honest discipline. 
"But," says brother Hine of the Monitory "the only weak feature in the 
plan is that it will enable ten agents to combine business and get double com- 
missions." You dear old "Patriarch," don't the combination have to settle 
all into one man's hands, in order to enter and pass the compact manager, 
and get the 20 per cent. ? The ten companies will all have to issue their 
commissions as agent to one man. This one man will have to do all the 
work, and at the end of a year the other nine agents are lost and forgotten. 
If this is the only objection, go to the foot, and try again. 

This Local's proposition went before the Pacific Insurance Union, received 
a courteous hearing, and the attention of a Special Committee for three 
months. But it did not pass. Too honest, I reckon. The 'sole agency" 
racket would have to be broken; the excepted cities stricken out. Some 
offices went wild at the idea of a Local Agent expressing an opinion, or dar- 


ing to suggest anything having even a remote bearing upon the subject. Go 
home, you dog, and lick the hand that feeds you. And like good boys, we 
went. I feel very kindly toward those gentlemen, and so does every sensible 
Local. Experience and the old educated Managers will teach them better. 
Some Managers hate certain Locals — on account of bitter opposition and a 
large and ever decreasing premium list — and they will not recognize an organ- 
ization in which the hated name appears. My dearly beloved, that is just 
what we seek to rectify. Under the present system, you compel us to fight 
hard for an existence. What we want is peace. We will shake hands and 
forgive and forget, take you all in, and give you a fair show, a fair share of 
our business. But if that is too honest, too manly, and at such utter va- 
riance with all the fixed laws that govern the business, why, don't shake; 
don't kiss and make up. The Locals can stand it until the companies rise in 
their might and settle both the General and Local Agents' hash. Settle which 
earns most of the commission. There is a big sermon in this little point, but 
I desist, for I am reminded of the fact that the erudite President of this As- 
sociation delegated me as a Special Committee of one, to write up 


It is a cheerful subject, and the grim irony of the request is so palpable 
that it haunts my sleep and makes night hideous. The stroke of midnight 
falls upon mine ear, howling winds shake my lowly cot, gloom and desolation 
is upon the earth. The hour is propitious. Now or never must these deep 
and damnable secrets of a Local's life be revealed. 

Managers and Specials, attend; and I will to you a "tale unfold," that will 
make that old dead Dane ashamed of himself. 

I open up my diary for 1885, and there I find faithfully recorded and com- 
piled a statement that must and will convince you that I have made an earn- 
est effort to live up to the 


I find that I have — 

Lied about my own Companies 9 times. 

Lied about other Companies 3, 100 times. 

Lied about the Managers 480 times. 

Lied about the Specials 2,310 times. 

Paid for drinks, and charged it to Postage account 2, 107 times. 

Charged Company for horse and buggy, and did not use it 97 times. 

Used Companies' money to pay butcher bill 11 times. 

Used Companies' money to pay grocery bill 19 times. 

Used Companies' money to pay other bills 197 times. 

Collected premiums and reported same as not collected 403 times. 

Over-insured risks 183 times. 

Gave other companies risks that I thought would burn 43 times. 

Told the truth about Staples 1 time. 

Told the truth about Sexton 2 times. 


Told the truth about Kinne Nary time. 

Sincerely regretted it 1, 112 times. 

Resolved never to do it again 914 times. 

Will do better in 1886, or resign. 

Sincerely yours, 
(Copyright applied for.) BRUCE B. LEE. 

The President — There is no question that from all these things 
we can find a moral somewhere, if we dig deep enough for it. 

The next Committee that is to report to-day is that of the Fire 
Department and Water Supply. I.find that Mr. Dickson is one 
of the Committee, and he is not present. Mr. A. J. Gunnison 
is another of the Committee, and you have heard that he will 
try and be present at the dinner to-night. 

Mr. Farnfield — He will get water to-night, Mr. President. 

The President — Yes, water, that is all. Mr. Pope is also one 
of the Committee, and he is not present. I will ask the Secre- 
tary to call on Mr. Pope and Mr. Dickson, and ask them to be 
present here on our convening again this afternoon. Possibly 
Mr. Gunnison might arrive on the morning train, and I think he 
has a paper — I understood him to say he had one. Has he left 
it with the Secretary ? 

Secretary — No, sir. 

The President — I would like to ask Mr. Ashton if he has not 
had an opportunity to think of something to tell us of the Local 
Agent during the night ? 

Mr. Ashton — Since last night I have not made any preparation 
on the subject. 

The President — I am very sorry; I would like to have some re- 
port from that Committee. 

It is nearly 12 o'clock, but we might listen to another paper. 
A. C. Donnell makes a report on " Statistics/' and I will ask the 
Secretary to read it. Members can procure a copy of the report 
as they are lying on the table. We will have made that much 
progress, and when we meet this afternoon we can have the 
other papers read and the election proceeded with. 




To the President and Members of the Underwriters^ Association of the Pacific: 
Gentlemen — Your Committee on Statistics in presenting the tables accom- 
panying this report, have but followed the plan adopted by former commit- 
tees. To the other members of the committee was delegated the task of the 
written portion of our report, the statistical tables being left to me. I will 
not, therefore, go into any details, leaving that to them, but will present the 
following comparative tables of San Francisco and country business for 1885. 

Kespectfully submitted, 

















California , 











All Companies 



















All Companies 












1 ^ 






+ .02 
— I .125 
+ j .037 







All Companies . 



— , .017 






















Percentage of Losses to Premiums 1885, 43 per cent. 

The President — Mr. Carpenter is the first gentleman named 
on the committee, and he has an excellent paper, but I do not 
think it well to call for it at this time, as it is now nearly twelve 

Mr. Carpenter — I will say I have not an excellent paper, but I 
have some few remarks to make that will not take more than 
three minutes. 

The President — We will listen to it now. 
a lengthy report. 

I thought you had 

To the President and Members of the Underwriters 1 Association of the Pacific: 
Gentlemen — Knowing the abilities of the other members of the Committee 
on statistics, I had felt that after Mr. Donnell had set up his table, and Mr. 
Belden had referred generally to the value of statistics, there would be little 
of interest to be said, and had accordingly intended to make no report my- 
self, but in pondering over the figures it occurred to me that you might be 
interested in one or two points pertaining to California business alone, to 
which I will call your attention. One point is the matter of rates. By refer- 
ence to tables prepared by previous committees I find that the annual aver- 
age rate of premium in California during the last fifteen years has been as 
follows: 1871, 1.08; 1872, 1.19; 1873, 1.58; 1874, 1.59; 1875, 1.58; 1876, 1.57; 
1877, 1.53; 1878, 1.48; 1879, 1.50; 1880, 1.43; 1881, 1.45; 1882, 1.53; 1883 
1.51; 1884, 1.51; 1885, 1.60. 

It will be noted that the lowest point reached since 1873 was in 1880, when 
the rate was 1.43, and since which time the figures have been increasing, un- 
til the rate of 1885, 1.60, is the highest which has pertained during a period 
of fifteen years. This increase is to some extent more apparent than real for 
the reason that the amount covered by long term policies is greater than 
heretofore; but even if this were not the case this increase in rate would be 
more than justified, as we shall see when we compare the amount of losses 
with the amount written. Confining ourselves only to the record of the last 


ten years, we find that during the first half of this period, viz: from 1876 to 
1880, the losses were in the proportion of ,0004 to the amount written, while 
during the last half of this period, viz: from 1881 to 1885 inclusive, the losses 
were in the proportion of .0005 to the amount written, thus showing an in- 
crease in losses in proportion to the amount written of 25 per cent, during 
the last five years, as compared with the preceding five years, so that if rates 
had been increased in the same proportion as losses, they would now be at 
nearly 1.80 instead of 1.60. From these figures it would not appear that 
there is any truth in the statement frequently made, to the effect that the 
fire hazard is being constantly improved, and that a reduction in rates should 
consequently follow. 

My figures would also seem to show that there is no foundation in truth to 
the statement sometimes made, to the effect that the Pacific Union ratings 
have resulted in a general reduction of the rate obtained, although here again 
the premiums on long term business present themselves as an unknown 
quantity, rendering accuracy impossible. 
Respectfully submitted, 


The President — There is really no question but that the mat- 
ter of statistics is the fundamental principle of the insurance 
business. Insurance is a system of general averages as we all 
know, and we cannot arrive at the general average — the cost of 
anything — but by getting at figures in the way of statistics that 
will permit us to make a general average, and I am very glad to 
find that the members of the Committee which we have heard 
from have done such excellent work. I know that Mr. Belden 
also has a report, at least I so understand it, and he will be pre- 
pared perhaps to give a more extended report, or at least a dif- 
ferent line of thought this afternoon. I trust the members will 
be here promptly at the hour to which we shall adjourn. With- 
out statistics to know what a risk costs, it would be simply a 
gamble, all this business of ours, and that is not what we are 
striving to get at, it is to get the cost of things, and then with a 
proper amount of profit we can get at a basis for conducting the 
business as it ought to be conducted. 

On motion of Mr. C. Meade, the meeting then adjourned until 
2 o'clock p. m. 


Afternoon Session. 

Wednesday, February 17th. 

The Association was called to order by the President, C. Mason 
Kinne. On doing so, he said, " The Secretary informs me that 
he called upon Mr. Landers, who says he got his notice, but that 
he did not pay much attention to it. That is all I wish to say 
about that." 

Mr. Sexton — It tells the whole story. 

"We have listened to Mr. Carpenter and Mr. Donnell on statis- 
tics, but we have yet Mr. H. K. Belden. Mr. Belden please 
take the stand. 


• Mr. President and Gentlemen: — Our esteemed President has made a de- 
cided departure from the custom which has heretofore governed the reports 
of committees, by requesting the expression of the individual views of mem- 
bers comprising such committes upon the subjects apportioned to them. 

I find myself unexpectedly called upon to submit a paper on the subject of 
Statistics, acting as a substitute for a former member who has so recently 
been called from among us, and whom we have been accustomed to meet at 
these annual meetings, since the organization of this Association. 

It has been necessary for the members of your committee to compare notes 
and to agree among themselves as to the subject matter of their respective 
papers. Mr. Donnell, having volunteered to submit the usual tabulated 
report showing the apportionment of the premium income of Californi i 
among local, Eastern and foreign companies; per cent, of losses sustained by 
each class; per cent, of loss and gain of premiums in California, and the 
general statement and per cent, of premiums and losses of the entire Coast, 
the other members found the material of available statistics was about ex- 
hausted, and we were left to our own devices. 

Statistics are of great importance, and should receive due consideration. 
They enter into and form the basis of all business calculations, and are an 
essential part of the business of insurance. 

This assertion being admitted, the question arises: what general statistics, 
have we of a practical nature, to which reference can be made to assist and 
guide us in conducting the business on this Coast? While the usual reports 
are of interest, they are of the nature of comparative statements, showing 
the distribution of business as between the various classes of companies 
mentioned. They show the general result of income and losses of California, 
but apart from this State, the entire Coast is lumped into one statement. 


As the results differ greatly in the respective States and Territories, it would 
be a step gained to make a report of the premium and loss accounts of each 
of same, but as no such record is kept except by a very few companies, it is 
impossible to present a report of this character. 

Should such a segregation be made by all companies, an advance in rates 
could be made in States and Territories where a continued excess of losses 
over premiums received occurred. 

To make an advance of rates on all classes would certainly appear an injus- 
tice, but no other method is possible, as, under the present system, it can- 
not be ascertained what particular classes of risks have occasioned disastrous 

The only method that suggests itself is that of keeping uniform classifica- 
tions. But few companies keep classifications, and I think none keep sec- 
tional statistics of this nature. The question might be asked: why is any 
segregation of the field necessary ? 

In answer, reference need only be made to the usual argument, which sets 
forth the advantage of the peculiar character of our redwood in California. 
This, in connection with the moderate climate, permanently established 
cities and towns, with their water supply and fire departments, makes this 
State distinctive. The general features of Oregon and Washington Terri- 
tory differ from those of California. The moisture of their climate exerts a 
favorable influence, while the material of which their buildings are con- 
structed, being mostly of pine, increases the hazard over that of redwood. 
The fluctuating tendency of their towns, owing to the development of rail- 
roads, increases the moral hazard of that section. Idaho and Montana are 
distinctive on account of the severity of their winters and the acknowledged 
hazard characteristic of mining sections. These features apply also to Ne- 
vada. Other points might be mentioned regarding Utah, Arizona and Col- 
orado, but enough has been said to prove the necessity of keeping separate 

The varied hazards of a new and fast developing territory would suggest 
that a tariff applied to this field, based upon Eastern calculations, is not ap- 
plicable. Notwithstanding the oft repeated assertion, made by aU, that the 
influences governing the business of this coast radically differs from those of 
the East, no attempt has been made to obtain data of its business whereby a 
test might be made of the tariff under which we are working. The rates 
which have prevailed for the past ten or twelve years prior to the organiza- 
tion of the Pacific Union, and which, outside of the principal towns, will 
doubtless continue to be used, were compiled from the classifications of some 
two or three companies whose business was the most extensive, and whose 
agencies were the earliest established, but Eastern rates entered largely into 
the calculations made. 

It is doubtful whether the experience of a few compauies and the rates 
governing the business of the Eastern States are a sufficient basis upon which 
to establish a tariff to apply to the business of 100 or more companies in a 
territory differing so materially from the Eastern field. 


If a recapitulation could be made annually of the business of all companies 
concerned, in the course of a few years it would determine whether the va- 
rious rates charged were adequate, and also demonstrate annually upon what 
classes of hazards losses had been sustained, and in what sections. Would 
not such statistics be of sufficient value to compensate each company for the 
additional labor and slight expense necessary in the keeping of these records? 
There has been no period in the history of underwriting on this coast when a 
uniform classification of risks could be so advantageously introduced as at 
the present time, now that all comp-inies are subject to a uniform tariff. 

A very able paper on classifications was written last year by our Mr. Geo. 
W. Dornin, and it was heartily endorsed by many members, but received no 
general adoption. If the methods explained in that paper should be given 
further consideration, and a committee appointed to draft a memorandum of 
hazards which, upon approval, if adopted by all companies, would furnish 
your future committees on statistics with material to present reports which 
would be of inci eased value and practical use. 

Kespectfully submitted. 


Mr. Sexton — Mr. Chairman, I made a memorandum as the last 
paper was being read. I have heard so often of the fire proof 
qualities of redwood (from my friend, Mr. Chalmers), and yet 
from Point Arena to Caspar Creek — that is the very home of the 
redwood — has cost the companies three dollars for one that 
they have got out of it. I do not know whether the nature of 
the redwood has something to do with off-setting the destructive 
work of the incendiary. 

Mr. Chalmers — As my name has been mentioned by Mr. Sex- 
ton, I will say, that wherever water gets into redwood it stops 
fire immediately. But in these lumbering towns on the coast, 
there is no water. If you get water into it, the fire goes out. I 
have seen in Eureka a building built of redwood slabs two and a 
half inches thick, where the adjoining building was burned down 
and the fire had never touched this one, resisting equally as well 
as iron. 

The President — The next topic on the programme is one of 

great importance to all in regard to getting the best method of 

bringing the points of the various companies before the public, 

and Mr. Calvert Meade will tell us something about advertising. 




Mr. President and Gentlemen of the Fire Underwriters' Association: — A frog 
once lived in a well. He was well fed, happy, and contented with his lot, 
as bright and ready-witted as the brightest of his tribe. His home, a crevice 
in the wall, a floating plank Lis sunny palace, where he basked in the warm 
rays of the noon-tide, and croaked his pleasure at dusky eve. He had grown 
old and seemingly was content. And yet he knew nothing of the babbling 
brook, the beauty of the foliage, or the thousand and one things that nature 
lends to charm. He was cabined, cribbed, confined, bound in. So, gentle- 
men, seems the subjects under discussion at our annual meeting. Each head 
has become bald, and we garner up the straggling locks at the side, and with 
the wand of a French cook conjure up a new dish; but it remains plain, un- 
adulterated hash. 

My subject, "How to Advertise,'' has been announced on the programme, 
and you have come together to learn from the delving of my brain how to 
take advantage of me and my neighbors, but you won't do it. Advertising 
came into vogue long before the advent of newspapers or calendars. To an 
antiquarian there is a pleasure in going back to the inception of a business 
and finding out how it started or originated, and of elaborating the same as 
much as time and space allow. I know you will agree with me when I state 
that one line of our business dates back many years, but whether you will 
agree with me in thinking it dates back to the commencement of the world, 
there is room for doubt. 

Adam and Eve lived in blissful ignorance (but not in a residence rated by 
the compact) for a long time, until a solicitor came along and advertised the 
lusciousness of a certain brand of fruit. He sold his wares, as we all know, 
and I have no doubt thought he did a good stroke of business in supplying 
the whole world. He had a monopoly such as Col. Sellers sighed for. And 
from that commencement other lines of business sprang into existence — that 
of a dre-smaker rank-? next, for we have authority for stating that Eve wore 
a fig leaf, but no bustle; and from that time on the monopoly was broken, 
for business multiplied. 

While the business of a solicitor came into vogue many centuries ago, anil 
shows the nobleness and antiquity of the line, yet it did not come into con- 
junction with underwriting till a later date. 

The vocation of a solicitor, as I have mentioned, is of great antiquity, and 
yet some of them think they know as much about insurance in two weeks' 
trotting around as if they had been two centuri-s underwriting. 

The special advertises the business in many ways. Every Club he belongs 
to, every Lodge he joins, every restaurant he pitronizes, hears of his com- 
pany. Every cigar he smokes, and every drink he takes helps it out. 
The drinks don't always help him out, though, if he advertises the company 
too much in liquid form. In fact, the bane of insurance is liquid. We have 
to pay the fire department for putting water in, and the patrol for keeping it 
out, and I don't wonder the insurance fraternity are cursed for such folly. 


One advantage of telling people about insurance in advertisements is that 
you can make a good impression at small expense. It don't cost much to 
add a few figures more or less. If its capital is $10,000,000 and assets $10,- 
000,000 we can alwaj'S add a couple of extra figures to represent the cents, 
which look well in type and adds correspondingly to the standing of the 

If it were not for advertising half the dear public would not know who the 
representatives of a company were, which would be sad, and would lower 
their dignity in their own eyes, while by rushing into print they obtain cheap 

Both legitimate and illegitimate companies desire to keep themselves be- 
fore the public except at one time of the year, and that is when the Legisla- 
ture meets. When that event occurs— which is worse than an ordinary fire, 
for it hits us all— the companies wish they were not even organized or ever 
existed. Then we have to draw on Doruin, Bromwell, Storey, et al., for ar- 
guments to kill the cinch bills, and draw checks to prevent them going 
through. That is a bad time of the year to advertise. The bigger the fig- 
ures of assets the bigger the check. 

Whoever originated the idea of not hiding your light under a bushel must 
have had some glimmering thoughts of insurance, for it's a dangerous prac- 
tice to hide lights under anything, especially bushels of anything. There is 
a danger of fire. The only light thing that ought to be hidden is premiums, 
and those should be hidden under big figures. 

If any insurance company wishes to get high up in the list of companies, it 
must advertise big. As an example of how it worke, I cite an instance you 
all remember. The biggest advertised company that ever existed on this 
Coast was old Mooney's Builders' Insurance Company, and it went up higher 
than any ever organized any where; created a big sensation and no vacuum, 
eclipsing even Gilderoy's kite. 

The benefits of advertising are comparative. Advertising is good for the 
companies; better for the advertising solicitor, and best for the proprietor of 
insurance journals. 

Although not particularly well endorsed or desirable, the plan of advertis- 
ing by a big fire is not a bad one — that is, if the company is strong enough to 
stand it. A big fire in a big city is a big ad, for a big company. Did not the 
Chicago and Boston fireworks prove good cards to those companies who 
came out scorched, but alive? — and it did not matter to them that the old 
Pacific and a host of others failed to advertise themselves in the same way, 
or whether they paid dollar for dollar, or gave a small portion in cash and a 
much larger portion in notes. 

But to go back to the frog in the well. He had competitors, and it was a 
daily strife to create business in his compact territory; but through persever- 
ance and attention he succeeded, and built up a competency for himself and 
stockholders — (it is needless to mention his stockholders were his stomach). 
He had his regular avenue of trade, though he realized that that must di~ 


Tninish in time, and he lacked the enterprise to overstep the boundaries of 
his domain or invent other ways and means for getting out of his rut and 
invading pastures new. He knew effete monarchies decay; yet he used the 
same sophistries and the same methods as in his youth, but they did not 
charm the younger generation, and he saw pigmies swallowing up the cov- 
eted morsels with an avidity that was taking away his breath. 

Awakening one morning by the growling of his stockholders, he took 
counsel with a wizard, who unhesitatingly told him he was behind the 
times. Get out of your well; the generation past is not the generation 
present; plunge in the larger stream; advertise; take more risks, and new 
ideas and inspirations, combined with a better judgment, will be given you. 

The company that understands this important governing principle, 
which realizes the necessities of the times and seeks to satisfy them; which 
systematically and wisely makes the people understand that good sound 
principles of underwriting, and no other, will be heeded; that means busi- 
ness, and is thoroughly alive to all that is going on, other things being equal, 
is the one which makes a financial triumph, and whose efforts are crowned 
with the bank account of success. 


The President — I notice a gentleman present, who has un- 
doubtedly come to get something to eat to-night, and he will 
find very little left. We have some oranges that we give to our 
delinquent members, or late ones, but at the same time, if our 
late members have anything to give to us, we are ready to hear it. 

Mr. Gunnison — I suppose I can help myself, and take the 
oranges along ? 

The President — You can take the floor and make your report, 
if you have anything to say on the subject of " Fire Department 
and Water Supply." Gentlemen, I have the pleasure of intro- 
ducing to you, Mr. Gunnison. 

Mr. Gunnison — About two weeks ago, I did think I should 
have a report. In fact, I even went so far as to take it out home 
to copy it. The next day I got a telegram that I must leave for 
Nevada the following day, and I did so, forgetting all about my 

I will call upon Mr. Sexton to make a report from the Library 



Mr. President and Members of the Underwriters' Association of the Pacific: 

Gentlemen — As one of the members of the Library Committee, I received, 
a few weeks since, an order from Mr. President to write up something about 
the Library, and his reply, given in his military style, to my answer that 
there was nothing to write, was so emphatic ''to write something anyhow,' 
that I did not dare to disobey; hence this infliction. 

I therefore visited the Library and found the books well kept and clean — 
without speck, spot or blemish — an evidence that we who have most need of 
the information contained therein don't have much time to read them, and 
in this connection I beg leave to suggest that we procure a snug room in this 
building for our books, and furnish it with a table, a half dozen chairs and a 
stove or fireplace — make it comfortable, give each member a key thereto, 
charge a dollar for each key to pay for furniture — and then when we want to 
find anything in the Library, we won't have to hunt up the key or won't 
disturb anyone. 

Such a snuggery would be a handy meeting place, where we could fix up 
papers, where two or more could meet and discuss co-insurance, over-insur- 
ance, under-insurance, valued policy insurance, for.ijs of policies, appraise- 
ment, apportionment, the good hotel, the accommodating stage-driver, and 
the thousand and one matters of interest that are daily coming up in our 
profession. This would also give us a better chance to read up than now, 
as we could visit there whenever we had a spare minute. 

I would also suggest that, as our meetings are for our education, and are 
in a measure a part of our Library, that an arrangement be made with the 
Compact Union to let this Association have the use of their meeting-room on 
the third Monday in each month, at 10.30 a. m. This day and hour will se- 
cure a better attendance of specials than a later day in the week, as there are 
always quite a number at home for Sunday, who will not go out until the 
afternoon trains on Mondays. This day will also, I believe, suit the mem- 
bers of the Compact, as they on Mondays have two days' mails to handle, and 
will not care to meet on that day. 

Eespectfully submitted. 


Mr. President — Brother Sexton is nothing if he is not practi- 
cal. We all know that, and his suggestion in regard to the room 
for ourselves and library, and the change in the day of meeting, 
certainly are matters that ought to be considered, perhaps right 
at this convention. Has any member any suggestion to offer in 
regard to the matter ? 

Mr. Gunnison — I wish to say that I take exception to that part 
of the report where Mr. Sexton cast reflections on the ignorance 


of the members of this Association, by saying that he is surprised 
to find the books very neat, which showed that we did not read 
them. I want it distinctly understood, that even if we do read 
them, we are neat enough in our general habits to keep the 
books clean. 

Mr. Sexton — I accept the amendment. 

The President — Mr. Spencer has arrived. 

Mr. Sexton — I move, with my usual modesty, if nobody else 
will, that the next Library Committee secure a room. 

The President — Better let that wait until Mr. Spencer has re- 
ported. I now call on Mr. Spencer for his report. 

Mr. Geo. "W. Spencer — I have very little to say, as I suppose 
the Assistant Librarian has done all that is necessary. It is a 
subject that is not calculated to call forth much enthusiasm, 
although we all are interested in the Library. My report is 


Mr. President and Gentlemen of the Association: 

During the year since our last Annual Meeting, the condition of your Li- 
brary has changed so slightly that we have but a brief report to make. With 
the exception of some few additional volumes of current publications, our 
catalogue has not been enlarged, and the funds in the Treasury remain un- 
changed, excepting that the expenditure of $30 for subscriptions and for the 
additional volumes referred to has reduced the balance on hand from $197.18 
to $167.18. The value and usefulness of this Library we believe is full} 7 ad- 
mitted by every member of this Association. Whilst one may not have oc- 
casion to use it frequently, there are times when every underwriter must ap- 
preciate the advantage of this valuable collection of standard works of refer- 
ence. Your interest in the Library, however, must not decline, and we 
should obtain if possible every publication of interest to our business and 
valuable as works of reference. Some months ago, at a meeting of the Board 
of Marine Underwriters, at which the Chairman of this Committee was pres- 
ent, it was proposed by one of the members that the Board should make an 
appropriation for the purchase of a Library for the use of the Marine Under- 
writers. His attention was directed to this Library, which contains many 
works referring more or less to Marine Insurance, and the suggestion made 
that, as it had been purchased with funds contributed jointly by Marine and 


Fire Underwriters, and was maintained by this Association for the benefit of 
all engaged in the Insurance business, the works required be purchased and 
donated to this Library. 

One Underwriters' Library is all we require in tlm city. We already have 
one which largely meets our wants, conveniently located, and its privileges 
freely extended to both Fire and Marine Underwriters. To add to our Li- 
brary, rather than to establish another in which many books, now on our 
shelves must be duplicated, we are of opinion will be favorably considered by 
our Marine friends and funds for the purpose contributed. We have been 
furnished by a prominent Marine Underwriter, with whom we have consulted 
in this matter, with a list of books which ,he is anxious to obtain. Many of 
them are very interesting to every member of this Asssociation, and the col- 
lection would be a valuable addition to our catalogue. We suggest, there- 
fore, Mr. President, that a committee of one be appointed to confer with the 
Marine Board, and request them to purchase a d donate to this Associati m 
a collection of such volumes as they may require. It being understood that 
our library shall at all times be accessible to all the Underwriters of this city» 
we have never experienced any difficulty in obtaining funds, and we suggest 
that the balance on hand be expended judiciously in en arging our Library, 
and making it as complete as possible in its special features. We have no 
use for the money except for this purpose, and when the amount we now 
have is exhausted, we feel assured our friends will cheerfully contribute all 
we may require. GEO. W. SPENCEK. 

The President — This report of Mr. Spencer should have been 
read first. Mr. Sexton will now see that it might have changed 
his views, or modified them somewhat in the execution of them, 
as to having a separate room, and only members of the Associa- 
tion having keys to it. It will not be difficult to harmonize the 
two ideas of Mr. Sexton and Mr. Spencer, so as to have a separ- 
ate room for the use of the members of the Association, where 
they can meet and talk matters over, in general and in particu- 
lar, to make up some papers at times when there are three or 
four on a committee to ascertain losses, and that the library 
shall be placed in a room where each member shall have a key 
for which he shall pay a dollar to pay for the furniture in the 
room, and in that way have occasion to visit the room more often 
and confer with the books. Mr. Spencer's suggestion in regard 
to the Marine Library comes in very properly with the sugges- 
tions of Mr. Sexton, and I am ready for a motion now. 

Mr. Spencer — I think Mr. Sexton's suggestion is a good one, 
^vith the exception that it should be exclusive for this Associa- 


tion. If that was not a part of his suggestion, I think it would 
be very good. 

Mr. Sexton — As to the word " exclusive " I do not care. 

Mr. Spencer — I think it would be a very good idea if we had a. 
library in the room to which we could resort at any time and 
each have keys. During one year when I was on the Library 
Committee I had the offer of a room, although we could not all 
have had keys to it. This room is open most of the time when 
not occupied by Board meetings or Committee meetings. It has 
always been understood, ever since that collection was taken up 
from our friends in the different offices that this Library was for 
the use of the underwriters. Although it belonged to this Asso- 
ciation and is known as the Library of this Association, it is at 
the service of every underwriter who has occasion to use it. I 
think we ought to publish that statement, A great many people 
do not know that the Library is for their use as well as ours. 
We should not be selfish in the matter. 

Mr. Sexton — I had not any idea of exclusive use. I do not 
know so much about this as Mr. Spencer. I think we should 
have some central room. As for furniture, we want a table, half 
a dozen chairs for the Library, and then give to each member a 

The President — To each office ? 

Mr. Sexton — Not to each office, but to each man, be he pres- 
ident, secretary or special, so that he can use the room at any 
time. I do not want to go to our office after a long journey and 
find that the key is in Oakland in the other trousers' pocket of 
the manager. I want it in a hurry. I move that a Library 
Committee be appointed by the incoming administration to pro- 
cure a room and a key for each member, and that the under- 
writers of the city have the privilege of the room. 

Mr. Chalmers — I second the motion. 

Mr. Spencer — One moment, Mr. President, it is not only tie 
renting of the room and the furnishing of it, but it will require 
some one to take care of it. 


Mr. Sexton — Let it go in as part of the expense, part of the 

Mr. Spencer — Our funds have not been so abundant that we 
have considered that we could hire a room that is large enough 
for our use. I have no doubt that the Library Committee can 
at any time get funds enough from our friends for all purposes 
necessary at any time. 

The President — There will then be no difficulty in carrying 
out the suggestions of both Mr. Sexton and Mr. Spencer, that 
we get a room and that the Library Committee get the books on 
Marine matters incorporated with ours. The motion was that a 
Library Committee be appointed by the incoming administration. 
I would prefer, as it is a part of this year's work, that a motion be 
offered to carry out the suggestions, and that I have the privi- 
lege of naming the Committee. 

Mr. Sexton — But I want to understand about this thing. You 
understand parliamentary rules better than most of us, but you 
are apt I believe to put on the Committee the maker of a motion. 
Now I do not want to serve on that. 

The President — It is an important matter, and if the motion 
can not be amended I will put it as it is. 

Mr. Clark — I will amend that motion to the extent that the 
present incumbent of the Chair be authorized to appoint the 

Amendment carried and motion adopted. 

The President — I will appoint as members of that Committee 
Mr. Spencer, and should have appointed Mr. Sexton, but will 
appoint Mr. Clark as the other member of the Committee. A 
Committee of two will be sufficient, as probably one of them will 
have duties to attend to in connection with this society, during 
the coming term, that will fit him as one of the members of that 

Mr. Chalmers — Another valuable suggestion of Mr. Sexton's 
was the change in the day of meeting. 


The President — I will say here that the by-laws have been 
amended so that the President can call a meeting any time he 
sees fit, and the meetings have been called for the past few weeks 
on Monday. 

Mr. Sexton — I think it would be better that it be understood 
that it is on Monday. 

Mr. Chalmers — I will make a motion that the monthly meet- 
ings be called on the third Monday in each month at 10:30 a. m. 

The President — The next business to come before us is the 
election of officers for the ensuing year. The first officer to 
be selected is that of President. The officers are President, 
Vice-President, Secretary and Treasurer combined in one, and 
Executive Committee, to consist of three members. Nomina- 
tions are now in order. 

Mr. Chalmers — Before that is done, I think it is proper to re- 
turn thanks to Mr. Brodrick for the very nice present he has 
sent us, the appreciation of which is manifest in the fact that the 
oranges are all gone. 

Mr. Sexton — Thanks for his contribution. 

Mr. Chalmers — Yes, thanks for his contribution. 

Mr. Spencer — I have already acknowledged the receipt of the 
same in behalf of the Association, but I think it would be well 
to put it on the records. 

Motion seconded and carried. 

The President — Nominations for President are now in order. 

Mr. J. W. Staples — I do not think it is necessary to take up 
the time of the Association very long with the name of the gen- 
tleman I propose to nominate for this position. It seems to be 
well understood that the nominee for this position shall be the 
Vice-President who has served for the past year, and I now 
therefore take pleasure in nominating for the position of Presi- 
dent for the ensuing term Mr. Z. P. Clark, and ask as a part of 


my motion that the Secretary be requested to cast the vote of 
this Association for Mr. Clark for that position. 

The President — The latter part of the motion will hardly be 
in order until we know whether there are any more nominations. 
I have no doubt it will be the sense of the meeting, but it will 
be rather forestalling any other action. I will ask first if there 
are any other nominations. 

There being none, a motion was then made, seconded and 
carried, that the nominations close. 

The President— Mr. Staples now moves that the Secretary be 
directed to cast the ballot for Mr. Z. P. Clark for President for 
the ensuing term. 

Motion carried, ballot cast, and the President announced that 
Mr. Z. P. Clark was duly elected President of the Association 
for the coming year. 

Mr. Z. P. Clark — Mr. President and gentlemen, I thank you 
kindly. This is certainly a proud moment to me. I was one of 
the original 34 to organize the Association in Virginia City, ten 
years ago last September, and it seems to me that the object of 
the Association at that time has been fully realized. The real 
object was to promulgate a correct practice among insurance 
men, and to elevate the profession proper, to a plane higher 
than it had attained on this Coast before. I think that is being 
accomplished. I am proud of your confidence in me, and I 
shall endeavor not to abuse it. I look around me to-day, and I 
see very few of the men who were with us there. Some of them 
have been promoted to managerial and higher trusts, but I 
assure you, gentlemen, that I do not think that any of us stand 
as high as we did on that day, by some six or seven thousand 
feet. (Laughter.) I thank you, gentlemen. 

The President — The next officer is Vice-President. 


Mr. Chalmers — I rise with much pleasure to nominate a gen- 
tleman for this position, who has taken a lively interest in this 
institution since its beginning. He was our first Secretary, and 
acted as Secretary many years. I would therefore nominate my 
esteemed friend, J. W. Staples. 

The President — Any other nominations ? If not, the nomi- 
nations will be declared closed. No objection being made to 
that proceeding, the nominations are closed, and the Secretary 
will be instructed to cast the ballot for Mr. Staples. 

The Secretary thereupon cast the ballot. 

The President — It gives me pleasure to announce that J. W. 
Staples has been elected your Vice-President. 

The next business is the selection of a Secretary, who also 
acts as Treasurer. I am ready to receive nominations for the 
position of Secretary and Treasurer. 

Mr. Dornin — Mr. President and gentlemen, it gives me the 
greatest satisfaction to offer the name of a gentleman for your 
ballots for the position of Secretary, who has acceptably filled 
that position. I do not think it would be well for us to change, 
and without any more parleying I name Mr. R. H. Naunton. 

The President — No other names being offered, the nominations 
are declared closed, and I will ask Mr. Spencer to deposit the 
ballot. No objections being offered, Mr. Spencer will cast the 

Mr. Spencer thereupon cast the ballot. 

The President— It gives me pleasure to announce that you 
have unanimously elected Mr. R. H. Naunton as your Secretary 
and Treasurer. 

Mr. Naunton — Gentlemen, I thank you. 

The President — We also have to select an Executive Commit- 
tee, consisting of three members of the Association. They are 
to be elected by ballot at the annual meeting. Nominations are 
now in order. The present Committee are Geo. F. Grant, H. 


W. Snow, and Oliver Hawes. There is no particular necessity 
that I know of for continuing the same Committee, and no par- 
ticular objection to continuing them. 

Mr. Staples — I would like to suggest that a new element, new 
blood, so to speak, should be infused into this Executive Com- 
mittee, and in looking around the room at the various gentlemen 
who are assembled here, I can name three gentlemen who 
I think will be accepted without any other nominations be- 
ing made. I would therefore ask that Mr. H. K. Belden, Geo. 
F. Ashton and Calvert Meade be elected an Executive Commit- 
tee, and nominate them for that position. 

The President — Gentlemen you have heard the names of the 
nominees. If there are none others nominated the Secretary 
will cast the ballot. It is so ordered. 

The Secretary cast the ballot as directed. 

The President— I declare Mr. H. K. Belden, Mr. Geo. F. 
Ashton and Mr. Calvert Meade duly elected as an Executive 

Mr. Farnfield — It has been the custom of this Association for 
many years past, on the retirement of the Secretary, to tender 
him the sum of $50 for his services during the past year. We 
who have gone through the arduous duties of the position of 
Secretary, know full well that the sum of $50 is no recompense 
for the amount of labor that has to be performed, but still it is 
a kind of acknowledgement that their services have been appre- 
ciated by the Association, I therefore move the sum of $50 be 
tendered to Mr. E. H. Naunton. 

The motion was seconded and carried. 

Mr. Naunton— Gentlemen, I beg to thank you all. 

The President — Any other business to come before this meet- 

Mr. Meade -I move that a vote of thanks be given Mr. 
Edwards for taking note of all our proceedings. 


The President — Has Mr. Edwards been in attendance at all our 
meetings ? 

Mr. Clark — I do not think it is necessary to pass a vote of that 
character any how, for he will print it. 

The President — Mr. Edwards, editor Coast Review, is a mem- 
ber of our Association, and he would be derelict if he did not 
attend our meetings; but for taking notes of the proceedings 
and publishing them, undoubtedly, it is entirely proper for this 
Association to pass such a resolution, which I understand is the 
real import of the motion. 

Motion carried. 

The President — If there is no further business to come before 
this Association, I would suggest, gentlemen, that before I 
release the gavel to the newly elected President, that the recom- 
mendations of the various committees and the reports that are 
offered shall receive his careful attention, and that as speedily 
as possible they be brought before this Association at its monthly 
meetings. This has accomplished a great deal of good during 1 
the past year, and you see yourselves that several important 
subjects have been finally brought down and disposed of in con- 
sequence of taking some immediate action regarding the recom- 
mendations made in the several papers. That is what we are 
here for and why we listen to the reading of them. But if we 
forget them, and do not attempt to carry out, or at least discuss 
the merits or demerits of the various propositions, as stated in 
their reports, then the great value of our proceedings is lost. I 
now desire to ask Mr. Clark to step forward and assume control 
of the ship of State. I might become more poetical, but as he 
and I are practical men, I simply hand him this gavel as his 
emblem of authority. 

Mr. Clark — I hardly feel myself competent to fill the position 
so ably filled by my predecessor; but, gentlemen, I shall ob- 
serve the very excellent example he has set for me, and shall 
make an effort to get the various papers in shape for discussion 
at our monthly meeting, and see to their publication. I shall 
expect from the members of this Association, and shall need their 


entire co-operation. At our next meeting I shall announce the 
various Committees for the year; it is impossible for me to do 
it now. 

Is there any other business? 

The Secretary — I know of no further business to come before 
the meeting. The next business will be adjournment. 

Mr. Sexton — I think that a vote of thanks to the retiring offi- 
cer will be in order, and I move a vote of thanks. 

The President — It is moved that a vote of thanks be tendered 
to the retiring President, Mr. C. Mason Kinne. Carried. 

Mr. Kinne — Mr. President and gentlemen, I thank you for 
this evidence of your feeling regarding the transactions of the 
past year, and I simply say that I have done the best I could, 
and that is what we are all trying to do. I thank you. 

Mr. Chalmers — I now move that we adjourn. 

Mr. Kinne — I second the motion. 

The motion being put and carried the Convention was ad- 


The Annual Dinner was partaken of at the Maison Doree on the evening of 
February 16, and between sixty and seventy sat down at 7 o'clock. The menu 
was excellent and fully appreciated, and the affair reflected great credit on 
the Committee, which consisted of Geo. F. Grant, Geo. W. Spencer, and W. 
L. Chalmers. Arriving at coffee and cigars, the President, Col. C. Mason 
Kinne, proceeded to uncork the enthusiasm of those present by a few remarks 
pertinent to the occasion, and then proceeded to call on various gentlemen in 
such a way as to keep the interest unflagging till past 12 o'clock. 

Mr. Charles D. Haven was first brought to his feet, followed by Wm. Sex- 
ton, D. J. Staples, Geo. F. Grant, C. F. Mullins, Geo. W. Spencer, A. J. Bry- 
ant, L. B. Edwards, C. F. Farnrield, Geo. D. Dornin, Z. P. Clark, K. V. 
Watt, A. D. Smith, Kudolph Herrold, M. D. Clapp, E. W. Carpenter, T. C. 
Grant, Thos. J. Conroy, Ben. E. Ward, Calvert Meade, K. H. Naunton, and 
Franz Jacoby. The addresses were interspersed with instrumental music, and 
by songs from S. D. Mayer, the following being adapted to the occasion from 
the "Mikado " by Mr. Farnfield, as a compliment to the retiring president, 
and which was gleefully chorused by all present. 


Be-hold the pop-u-lar un-der-wri-ter, 

A per-son-age of mar-tial rank and ti-tle, 
A dig-ni-fied and potent ad-jus-ter, 
Whose func-tions are par-tic-u-lar ly vi-tal. 
'Tis Charlie Kinne— Charlie Kinne ; 
To insurance halls we welcome him. 

He has strug-gled with non-con-cur-ren-cy, 
And for his Rule has fought with might and main; 

Suc-cess now crowns his id-io-syn-cra-sy; 

We ne'er shall hear of non-con-cur-ren-cy again. 
'Tis Charlie Kinne, etc. 

So hail our pop-u-lar sol-dier Chair-man, 

He's a man in the pro-fes-sion stands very high; 

Twelve months he's pre-si-ded o'er us no-bly, 
But this night he 's del-e-ga-ted to die. 
'Tis Charlie Kinne, etc. 

The following resolutions pertaining to the adjustment of 
losses, adopted by the Fire Underwriters' Association of the 
Pacific in 1885, are published for the benefit of all concerned. 


Besolved, That this Association hereby recommends the use of the Kinne 
Bule for the apportionment of loss under non-concurrent policies, in all cases 
of difference of opinion arising between interested parties. 



The principle governing all apportionments of non-concurrent policies is, 
that general and specific insurances must be regarded as co-insurances; and 
general insurance must float over and contribute to loss on all subjects 
under its protection, in the proportions of the respective losses thereon, until 
the assured is indemnified or the policy exhausted. 


The correct method of applying the principle has been formulated in the 

First — Ascertain the non-concurrence of the various policies and classify 
the various items covered, into as many groups as the non-concurrence de- 
mands, whether of property, location or ownership. 

Second — Ascertain the loss on such groups of items separately. 

Third— If but a single group is found with a loss upon it, the amounts of 
all policies covering the group contribute pro rata. 


Fourth— If more than one group has sustained a loss, and such loss on one 
or more groups be equal to or greater than the totals of general and specific 
insurance thereon, then let the whole amount of such insurances apply to 
the payment of loss on such groups. 


Fifth — If more than one group has sustained a loss, and such loss be less 
than the totals of unexhausted general and specific insurances thereon, then 
apportion the amount of each policy covering on such groups generally, to 
cover specifically on such groups, in the same proportion that the sum of 
the losses on such groups bears to the loss on each individual group. 

[Note. — When a group is covered by one or more general policies it would be well to see 
at once if an apportionment as above on that group would equal the loss, as in case it 
will not it will show, without further calculation, that the whole amount of loss on such 
group must be met by such policies pro rata, and the remainder only apportioned. In 
such cases, carrying out step 6 simply accomplishes by a longer process what is here in- 


Sixth —If the loss on any group or groups is then found to be greater than 
the sum of the now specific insurances as apportioned, add sufficient to such 
specific insurances to make up the loss on the group, taking the amount of 
the deficiency from the now specific insurances of the heretofore general 
amounts previously covering the now deficient groups, which cover on groups 
having an excess of insurance, in the proportion that their sums bear to their 
individual amounts. 

Seventh— Cause the amounts of all the now specific insurances to severally 
contribute pro rata to pay the partial losses, and it will be found that the 
whole scheme has resulted in the claimant being fully indemnified in accord- 
ance with the various contracts and on a basis which preserves the equities 
between the companies throughout. 


The following shall be the minimum charges for adjusting losses, viz.: 

$15.00 per day and expenses, when adjusting for one or more companies on 
one loss. 

$20.00 per day and expenses when adjusting for one or more companies on 
two or more losses. 

"Expenses" are understood to include traveling, hotel and all necessary 
incidental expenses. 

Any excess of these charges must be by special contract, entered into by 
the company or companies and adjuster in each case. 


The principle being that all cases shall be treated as if the adjuster started 
with papers for all the losses. — It is understood that 


Whenever and wherever an Adjuster is employed in the settlement of differ- 
ent losses for more than one company, he shall charge to each company sep- 
arately his per diem and expenses while actually engaged in the settlement 
of each separate loss — including his per diem and expenses while diverted 
from any general point of destination — while his per diem and expenses to 
and from said point and place of residence shall be distributed in proportion 
to the amount of insurance affected by the several losses adjusted by him. 

Whenever and wherever a Special Agent, on a trip for his company as spe- 
cial agent, is appointed to adjust a loss for others, he shall charge to such 
company or companies so appointing him his per diem and expenses while 
actually engaged on such loss or losses— including his per diem and expenses 
while diverted from the nearest point on his trip to the place of loss — and 
one-half oi his per diem and expenses to and from his place of residence and 
said nearest point, computed on direct time and travel thereto, distributed in 
proportion to the amount of insurance affected by the several losses adjusted 
by him. 


The so-called Adjusters' Clause is intended, and shall be construed to mean, 
to cover the per diem and expenses of one adjuster only for all companies in- 
terested; and that when all the policies upon an individual loss contain the 
Adjusters' Clause, the assured shall be chargeable for only the per diem and 
expenses of one adjuster, although two or more may have been employed. 

When one or more policies upon an individual loss contain the Adjusters' 
Clause and others do not, the assured shall be chargeable only a pro rata 
amount of the adjuster's per diem and expenses for the policies having the 
Adjusters' Clause, when one adjuster acts for all companies concerned in said 
loss; the policies not having the same, to pay their own pro rata of said per 
diem and expenses. 

When one adjuster is employed to adjust several losses, it is not proper to 
collect under the Adjusters' Clause, for each individual loss; but the expenses 
for all the losses shall be borne proportionately by all the policies interested, 
apportioned according to preceding resolutions. 


When more than one company is interested in a loss, any company not 
employing an adjuster but authorizing an agent to attend to the matter, shall 
pro rata with the company or companies sending an adjuster or adjusters in 
all expenses or shall not have the benefit of the work of the adjusters em- 

in Mfcmoriam. 

The Committee appointed by the "Fire Underwriters' 
Association of the Pacific," to prepare suitable resolutions 
of respect to the memory of Samuel O. Hunt, beg to sub- 
mit the following: 

Resolved, That by the death of Samuel O. Hunt, this 
Association has lost an honored and respected member, 
one who had attained a prominent position as an Under- 
writer, and who was highly esteemed by the Insurance 
profession. In business he was regarded as an upright 
and honorable man. His loss will be sincerely mourned 
by his friends and associates, to whom his memory is 
endeared by the many good and sterling qualities he pos- 

Resolved, That we tender to the family of the deceased 
our heartfelt sympathy in their affliction. 

Resolved, That these resolutions be spread upon the 
minutes of this Association, and a copy of same be sent to 
the family of the deceased. 



Jtt Sltemariarit. 

Whereas, It has pleased Providence to remove from our 
companionship and his field of usefulness, our comrade 
and ex-President, A. P. Flint; and, 

Whereas, We deem his loss a severe stroke to us as an 
Association, and to the business of underwriting upon the 
Pacific Coast. Therefore be it 

Resolved, That we deeply sympathize with his afflicted 
family and friends in their bereavement, and shall always 
cherish his memory in this Association, as one whom it 
will be an honor to remember as a friend, and whose virtues 
and good qualities of heart it will be praiseworthy to 

Resolved, That these resolutions be spread upon the 
minutes of the Association, and a copy be sent to the sor- 
rowing family of the deceased. 





Geo. F. Ashton, Special Agent, Connecticut Insurance Company. 

L. L. Bromwell, President, California Insurance Company, and General 

Agent, Union Insurance Company of New Zealand. 
E. Brown, General Agent, Phoenix, American and Star Insurance Companies, 

and the Insurance Company of Pennsylvania. 
A. J. Bryant, President, State Investment and Insurance Company. 
J. D. Bailey, Secretary, Union Insurance Company. 
Geo. E. Butler, General Agent, S F. Agency Phoenix Assurance Company of 

London, British America and Western Assurance Companies of Canada. 
H. K. Belden, Special Agent, Hartford Insurance Company. 
D. M. Bokee, Special Agent and Adjuster, with Hunt & Mitchell's Agency. 
Geo. W. Burns, Special Agent and Adjuster, with iEtna Insurance Company. 

D. B. Bnsh, Jr., Special Agent, Home Mutual Insurance Company. 
Z. P. Clark, General Agent, Commercial Union Assurance Company. 

W. J. Callingham, General Agent, South British & National and City of 

London Insurance Companies. 
W. L. Chalmers, Special Agent and Adjuster, Fire Insurance Association of 

J. P. Cox, with Hutchinson & Mann's Agency. 

E. W. Carpenter, Assistant Secretary, Firemans Fund Insurance Company. 
J. W. G. Cofran, Manager, Portland, Oregon. 

Chas. H. Cushing, Secretary, State Investment and Insurance Company. 

O. H. Cole, Adjuster, Portland, Oregon. 

Homer A. Craig, General Agent, Brown, Craig & Co. 

T. J. Conroy, Assistant Manager, with Pacific Insurance Union. 

Robert Dickson, Manager, Imperial, London, Northern and Queen Insurance 

Geo. D. Dornin, Manager, Lion, Orient and Washington Fire Insurance 

Geo. W. Dornin, with Lion, Orient and Washington Fire Insurance Com- 

A. C. Donnell, City Agent, California Insurance Company. 

Henry Dobinson, General Agent, Oakland, Cal. 

W. S. Davis, City Agent, with Brown, Craig & Co. 

Jas. H. DeVeuve, Special Agent, State Investment and Insurance Company. 

William J. Dutton, Secretary, Firemans Fund Insurance Company. 

Geo. Easton, Agent, Jacobs & Easton Agency. 

W. G. Elliott, City Agent, Lion, Orient and Washington Fire Insurance Com- 

L. B. Edwards, Special Agent and Adjuster, with Balfour & Guthrie's Agency. 


C. P. Ferry, Adjuster, with Sun Insurance Company, of San Francisco. 
Win. Frank, General Agent, Hamburg-Magdeburg and Germania Fire Insur- 
ance Companies. 
Ed. P. Farns worth, Special Agent, Hutchinson & Mann's Agency. 

B. Faymnnville, Special Agent, Firemans Fund Insurance Company. 
Richard Faraday, General Agent, Providence-Washington & Prussian Nation- 
al Insurance Companies. 

Thos. W. Fenn, Special Agent and Adjuster, Jacobs & Easton Agency. 

Charles P. Farnfield, Secretary, Anglo-Nevada Assurance Corporation. 

Geo. F. Grant, Assistant Manager, North British <fc Mercantile & German- 
American Insurance Companies. 

J. R. Garniss, Fire Insurance Adjuster and General Agent, Fidelity and 
Casualty Company. 

A. R. Gunnison, Special Agent and Adjuster, Commercial Insurance Co. 

T. C. Grant, General Agent, North British & Jlercantile and German-Ameri- 
can Insurance Companies. 

A. R. Gurrey, Special Agent, Imperial, London, Northern and Queen Insur- 
ance Companies. 

H. M. Grant, Special Agent, with Balfour, Guthrie & Co. 

J. F Houghton, President, Home Mutual Insurance Company. 

Oliver Hawes, General Agent, Bowery & Howard Insurance Companies. 

Chas. D. Haven, Resident Secretary, The Liverpool & London & Globe Insur- 
ance Company. 

Rudolph Herrold, General Agent, Hamburg-Bremen Insurance Company. 

E. A. Halsey, with Messrs. Hutchinson & Mann. 

O. N. Hall, Special Agent, with Scottish Union & National Insurance Com- 

W. F. Herrick, Adjuster, Commercial Insurance Company of California. 

Walter H. Holmes. Special Agent, Phoenix & Home Insurance Companies. 

E. B. Haldan, General Agent, Phoenix of London, British America and West- 

ern, of Toronto, Insurance Companies. 

F. T. Hovt, General Agent, Oakland Home Insurance Company. 

Wm. Greer Harrison, President, Anglo-Nevada Assurance Corporation. 
J. R. Hillman, Special Agent, Southern California Insurance Company. 
S. D. Ives, Special Agent, Firemans Fund Insurance Company. 
Julius Jacobs, Agent, Jacobs & Easton Agency. 

J. C. Jennings, General Agent, New Hampshire Insurance Company. 
Franz Jacob}', General Agent, Prussian National Insurance Company. 
E B. Jennings, Special Agent and Adjuster, with Southern California In- 
surance Company. 

C. Mason Kinne, Special Agent and Adjuster, The Liverpool & London & 

Globe Insurance Company. 
John Landers, General Agent. 

Melville S. Levy, Special Agent, with Jacobs & Easton 
H. C. L'hote, Special Agent, Western Insurance Company of California. 


W. J. Landers, General Agent, Guardian Assurance Company. 

Win. H Lowden, Adjuster, North British & Mercantile and German-American 
Insurance Companies. 

T. L. Miller, Special Agent, Newhall & Co.'s Agency. 

Calvert Meade, General Agent. Union Insurance Company of California. 

H. R Mann. Agent, Hutchinson & Mann's Agency. 

T. A Mitchell, Agent, Hunt & Mitchell's Agency. 

Louis Mel. Special Agent and Adjuster, Royal, Norwich Union & Lancashire 
Insurance Companies. 

C. B. McHenry, Special Agent, German-American Insurance Company. 

C. F. Mullins, Manager, Commercial Union Assurance Company. 

C. E. Moody, General Agent, Amazon, American Central, Pac fie and North- 
western National Insurance Companies. 

I. Manheim, General Agent, Scottish Union & National, and National of Hart- 
ford, Insurance Companies. 

C. M. Nichols, Assistant Manager, Pacific Insurance Union. 

R. H. Naunton, Manager City Department, South British & National and 
City of London Insurance Companies. 

Paul M N ppert, Special Agent, Phoenix & Home Insurance Companies. 

E. E. Potter, Secretary and Treasurer, Sun Insurance Company of California, 
and General Agent, Williamsburg City Insurance Company. 

T. E. Pope, Special Agent and Adjuster, iEtna Insurance Company. 

Geo. C. Pratt, Special Agent, California Insurance Comp »ny. 

S. B. Riggen, Speci il Agent and Adjuster, Portland, Oregon. 

R. S. Robbins, with Pacific Insurance Union. 

Wm. Sexton, Assistant Manager, Lion, Orient and Washington Fire Insur- 
ance Companies. 

A. D. Smith, General Agent, Amazon, American Central, Pacific and North- 

H. Bronson Smith, Special Agent, Smith <te Moody's Agency, 
western National Insurance Companies. 

Geo W. Spencer, Manager, London & Lancashire, Manchester, Continental, 
Caledonian and American Insurance Companies. 

J. W. Staples. Manager, Scottish Union & National Insurance Companies. 

H. W. Snow, General Agent Southern California Insurance Company. 

Chas. R. Story, Secretary, Home Mutual Insurance Company. 

Amos F. Sewell, Special Agent, Union Insurance Company. 

D. J. Staples, President, Firemans Fund Insurance Company. 
Alfred Stillman, Manager, Pacific Insurance Union, San Francisco. 
S. E. Strickland, Fire Insurance Adjuster. 

G. Touchard, President, Union Insurance Company of California. 
J. M. Thompson, Special Agent, Butler & Haldan's Agency. 
W. P. Thomas, Special Agent and Adjuster, South British and National In- 
surance and City of London Insurance Companies. 
J. Scott Wilson, General Agent, Hutchinson & Mann. 
D. B. Wilson, Special Agent, with Brown, Craig & Co.'s Agency. 

120 fire underwriters' association. 

G. W. Wickes, General Agent, Oakland Home Insurance Company. 
A. J. Wetzlar. Fire Insurance Adjuster. 
ft, Y Watt. City Agent, with Smith & Moody. 

H. B. Wheaton, Special Agent and Adjuster, with Brown, Craig & Co. 
Frank \Y. Young, Special Agent, Lion, Orient & Washington Insurance 


W. J. Brodrick, Insurance Agent, Los Angeles. 

W. W. Dudley, Illinois State Agent, German American Insurance Company. 
J. G. Edwards, Editor Coast Review, 320 Sansome street, San Francisco. 
C. B. Hine, Editor Insurance Monitor , New York. 

C. T. Hopkins, late President California Insurance Company, and General 

Agent Union Insurance Company of New Zealand. 

A. Hill Jack, General Manager, National Fire & Marine Insurance Company 

of New Zealand. 

D. L. Kirby, Associate Manager, Eoyal Canadian Insurance Company. 
Jas. Kip, formerly of the London Assurance Company. 

B. B. Lee, Insurance Agent, Red Bluff. 

G. F. McLellan, Insurance Agent, Los Angeles. 

W. N. Olmstead, 62 Cedar street, room 10, New York City. 

E. E Ryan, Agency, 110 La Salle street, Chicago, 111. 
Peter Winne, Insurance Agent, Denver, Col. 


Henry Balzer, Agent, Svea, North German and Helvetia Insurance Com- 

A. P. Flint, Manager, Hartford Fire Insurance Company. 

S. O. Hunt, General Agent, Jonathan Hunt, Son & Co.'s Agency. 

Henry Smith, Special Agent and Adjuster, The Liverpool & London & Globe 
Insurance Company. 

W. J. Stoddard, Agent, New York Underwriters' Agency, etc. 


B. F. LOW, President, H. H. BIGELOW, Vice-President, 

J. W. STAPLES, Secretary. 


GEO D. DORNIN, President, W. L. CHALMERS, Vice-President, 

J. W. STAPLES, Secretary. 


A. P. FLINT, President, * ED. BROWN, Vice President, 

J. W. STAPLES, Secretary. 


C. T. HOPKINS, President, A. D. SMITH, Vice-President, 

J. W. STAPLES, Secretary.. 


GEO. W. SPENCER, President, E W. CARPENTER, Vice-President, 

J. W. STAPLES, Secretary. 


L. L. BROMWELL, President, GEO. F. GRANT, Vice-President, 

J. W. STAPLES, Secretary. 


GEO. F GRANT, President, E. W. CARPENTER, Vice-President, 

J. W. STAPLES, Secretary. 


E. W. CARPENTER, President, WM. SEXTON, Vice-President, 

R. H. NAUNTON. Secretary. 


WM. SEXTON. President, C. MASON KINNE, Vice-President, 

C. P. FARNFIELD, Secretary. 


C. MASON KINNE, President, Z. P. CLARK, Vice-President, 

R H. NAUNTON, Secretary. 


Z. P. CLARK, President, J. W. STAPLES, Vice-President, 

R. H. NAUNTON, Secretary. 

r ire Underwriters Association of tfje Pacific. 

Officers for the Year 1886. 

Z. P. CLARK President. 

J. W. STAPLES Vice-President. 

R. H. NAUNTON Secretary and Treasurer. 



Local Agents. 

Forms of Policies. 

Losses and Adjustments. 

Legislation and Taxation. 

Fire Department and Water Supply. 



"California Knapsack," GEO. F. GRANT, Editor. 

ARTICLE VIII . (In Force April 30, 1887. 


Upon its coming to the knowledge of this Association at 

ARTICLE III (In Forof Anril m 1XK7 \ regular meeting that any member would be ineligible to m 

axvxx^j^il in. [in force April JU, 1887.) bership m accordance with Article 3 of this Constitution 

vt tptutt ttv sha11 . hy . unseeml y conduct become objectionable, he mai 

^LitxlBlLirY. a majority vote of those present, be cited to appear before 

. SST^-rtT el F ?iW T t0 m6 ^ ershi P Wh0 tS^^&^£%£ 8SHMS ' 
s not connected with a Fire Insurance Company as Association by a two-thirds vote of those present provj 
in Officer, General Agent or Adjuster, or who is however, that every member shall have had written or prii 

,^4. « v>.^.p«„„'~ i a j' ±. /t» . notice of such meeting mailed or delivered to his address 

lot a professional Adjuster. (Persons who act as shown by the Secretary's books, at least five days before s 

he Adjuster or counsellor for a claimant shall not meeting, such notice to state that action is to be taken in t ' 

>e eligible to membership.) Applications for mem- ( * 


.ersh.pcan only be recced af a regular "Sg J^^Xt^WS&Sft*^ 
•I the Association; they must be on the printed the next regular meeting by a two-thirds vote of those 
orm and bear the signature of the applicant, as } sent * 
srell as the signature of the proposer and seconder, 
'hey will then be laid over until the next regular 

leeting, and in the meantime, at least two weeks 

written or printed notice shall be given each mem- 

e L° f ^ e f, SS0C Q iati0 ?> of the names of the candi- San Francisco, May 2, 1887. 

ates ? by the Secretary, before a ballot can be 


Herewith I beg to transmit you a copy of the proceedings of our Annual 
Meeting held February 15th and 16th last. Should you desire additional 
copies, please address the undersigned. The charge for extras will be fifty 
cents each. 

I also hand you herewith, printed copies of such Amendments to the 
Constitution and By-Laws as have been adopted since last publication. 


that the regular monthly meeting of the Association, for May, will be held at 
the rooms of the Board of Underwriters, at 307 Sansome street, on 

Monday, May 16th, 1887, at 2.30 o'clock p. m. 

The applications for membership of Messrs. J. Drummond Macpherson, 
Manager South British Insurance Company, Henry T. Fennel, Special Agent 
and Adjuster for Commercial Insurance Company, and Julian Sonntag, Special 
Agent National of Ireland, having been read at the last meeting, will come up 
for ballot. 

Other matters of general interest will be brought before the meeting, and 

it is earnestly hoped that you will be present. 

By order of the President. 









Association of tpe Pacific. 


SAN FRANCISCO, FEBRUARY i6th and 17TH, 1887. 



Pire Qnderwrifers Association of tr)e I acific. 

Officers for the Year 1886. 

Z. P. CLAEK President. 

J. W. STAPLES ' Vice-President. 

R. H. NAUNTON Secretary. 



Local Agents. 

Forms of Policies. 

Losses and Adjustments. 

Legislation and Taxation, 

Fire Department and Water Supply. 



1 'California Knapsack," GEO. F. GRANT, Editor. 

Pire Underwriters Association of trje I acifit 

Eleventh Annual meeting. 


Tuesday, February 15. 

ANNUAL REPORT R. H. Naunton, Treasurer 

ANNUAL ADDRESS Z. P. Clark, President 


LOCAL AGENTS C. F. Mulllns, J. W. G. Cofran, D. B. Wilson 

DOES IT PAY? A. J. Wetzlab 

FORMS OF POLICIES. . . .C. P. Ferry, B. Faymonville, D. B. Bush, Jr. 



Wednesday, February 16. 


LOSSES AND ADJUSTMENTS. . W. L. Chalmers, J. M. Thompson, 

Wm. H. Lowden 



Geo. C. Pratt 



A.:R. Gukrey, Geo. W. Dornin 


STATISTICS W. P. Thomas, Wm. F. Herrick, H. Bronson Smith 


LIBRARY Geo. W. Spencer, Wm. Sexton 



Eleventh Annual Meeting of the Fire Underwriters' 
Association of the Pacific . 

307 Sansome Street, ) 

San Francisco, February 15, 1887, ) 

The Eleventh Annual Meeting of the Fire Underwriters' Asso- 
ciation of the Pacific was commenced this day in the Assembly 
Booms of the Pacific Insurance Union, 307 Sansome street, Z. 
P. Clark, President, in the chair, and R. H. Naunton, Secretary. 

The President called the meeting to order shortly after 10 
o'clock, and said: In accordance with the constitutional pro- 
vision, I have called you together to celebrate the eleventh anni- 
versary of our Association's organization. The first business 
in order is the calling of the roll. Mr. Secretary, will you take 
a minute of those who are present? 

In compliance with th 
tary then noted that the 

A. K. Gunnison, 
W. L. Chalmers, 
Z. P. Clark, 

B. S. Bobbins, 
«T. Scott Wilson, 
Geo. Mel, 

B. H. Naunton, 
Cal. Meade, 
H. K. Belden, 
T. W. Fenn, 
D. M. Bokee, 
Geo. F. Ashton, 
R. Y. Watt, 
J. B. Hillman, 
Geo. F. Grant, 
A. J. Wetzlar, 
T. A. Mitchell, 
C P, Farnfield, 

C. E. Moody, 

e request of the President, the Secre- 
following members were in attendance: 

P. M. Neppert, 
J. D. Maxwell, 

C. F. Mullins, 

D. J. Staples, 
B. Fayinonville, 
A. D. Smith, 

A. A. Snyder, 
Geo. D. Dornin 
Geo. M, Mitchell, 
J. G. Edwards, 
W. H. Lowden, 
L. B. Edwards, 
I. Manheim, 
H. W. Snow, 

E. P. Farusworth, 
E. Brown, 

W. J. Callingham, 
H. M. Grant, 
Geo. C. Boardman, 

J. W. Staples, 
A. Stillman, 
W. J. Dutton, 
W. Frank, 
C. P. Ferry, 
A. C. Driffield, 
W. Sexton, 
H. A. Craig, 
E. W. Carpenter, 
T. C. Grant. 


E. G. Sproul, 
J. Conrad, 
H. E. Williams, 
H. T. Fennel, 
Geo. Tyson, 


Having gone through the routine business of the Association, 
the President said: We will now proceed with the order of busi- 
ness as published in the programme. The first in order is that 
of the report of the Secretary and Treasurer. 

The Secretary then read his report: 

San Francisco, February 15, 1887. 
Fire Underwriters' Association of the Pacific: 

Mr. President and Gentlemen-— Another year has passed since I last had 
the pleasure of submitting to you my annual report as Secretary and Treas- 
urer. During this time 12 new members have been admitted, 2 have re- 
signed, 4 have been dropped from the roll, and from 105 which we had last 
February leaves 111 members on the roll of paying members, some of whom, 
however, will not be eligible for membership during the current year from 
having left the insurance business, and are now following other pursuits. 

I have handed my account to your Executive Committee, and trust that 
with their indorsement everything will prove satisfactory. 

Respectfully yours, 


Secretary and Treasurer. 


R. H. Naunton, Secretary and Treasurer, in account with the Fire 
Underwriters' Association of the Pacific. 


To balance February, 1886 $41 43 

" Annual dues 106 members, at $2.50 $265 00 

" Dues 2 members, at $1.00 2 00 

" Dues 2 members, at 50 cents, 1 00 

" Entrance fees 12 members, at $5.00 60 00 

328 00 

" 9 badges sold, at $2 50 22 50 

Total .$391 93 

1886. Cr. 

Feb. 18. By Expressage on chairs $1 50 

" 18. " R. H. Naunton, for services as Secretary 50 00 

" 25. " Expenses of Dinner Committee 12 00 

March 6. " Services J. F. Gawthorne, reporter 28 00 

4 ' 6. 4 ' Key to new Board room 50 

" 6. " Postage on circulars 100 


Mar. 16. By C. M. Kinne, dinner expenses 10 00 

25. " Dakin for printing „ 2 25 

M 25. " Dakin for printing statistics 3 00 

April 1. " Goodwin <fc Co., printing notices of meeting. . 3 00 

" 14. " Postage and delivery 150 

'• 20. " Postage 43 copies of annual proceedings 1 75 

22. " Eeceipt book 50 

11 25. " Spaulding & Co., on account printing annual 

proceedings 120 00 

May 14. ' ' Bosqui & Co., printing 9 00 

" 14. " Bosqui & Co., printing 3 00 

14. " Shreve & Co., for 12 badges 30 00 

" 14 . " Postage and delivery 1 25 

June 30. ' ' Postage and delivery. . . . : 1 00 

30. " Spaulding & Co., balance 60 80 

July 2. " Postage and delivery 1 00 

31. " Postage and delivery 1 00 

Aug. 26. " Postage and delivery 1 25 

Sept. 19. " Postage and delivery 1 00 

Oct. 18. " Postage and delivery. . . . 1 00 

" 18. " 250 envelopes 75 

18. " Tel'm to W. F. Fox, Pres'tU. Ass'nof N. West 2 25 

Nov. 10. " Badge No. 28, M. S. Levy 2 50 

" 15. •■ Postage and delivery 1 25 

Dec. 15. " 250 envelopes 50 

" 15. " Postage and delivery 100 

" 17. ' ; Hughes & Co., printing for October notices.. . 1 50 

17. " Hughes & Co., printing for November notices 175 

'• 17. " Barry & Co., printing proxies and applications 4 50 

" 17. '• Spaulding & Co., printing notices, July 2 00 

'• 17. " Spaulding & Co., printing notices, August.... 150 

" 17. '• Spaulding & Co , printing notices, September. 2 00 

{i 17. " Carlisle & Co., printing agreements to appraise 10 00 


Jan. 10. " Postage and delivery 100 

Feb. 8. " Postage and delivery 1 00 

" 8. '• 1 box of envelopes 60 

11 10. " Postage and delivery (Dinner Committee).. . 100 

$280 40 

Balance on hand 11 53 

Total ._|391_93 

The President — Without objection, it will take the usual 


The financial statement was then read by the Treasurer; was 
received and placed on file. 

Geo. F. Grant — I now move that the Treasurer be authorized 
to draw a warrant in his own favor in the usual amount of $50 
for his services. 

The motion being seconded and put to a vote was declared 

The Secretary — I beg to thank you for your kind considera- 
tion. I have done as well as I could, but have not been able to 
give the proper attention to the business that it ought to have 

The President — The next in order of business is the report of 
the President. 

Mr. Geo. F. Grant was then called to the chair. 

The President — I will state to the members that I sent out 
invitations to well-known writers to favor us with papers that 
might be interesting and profitable to us 3 and I have replies 
from some of them that I shall be glad to read to you. I told 
Mr. McLellan that if he did not write a paper I would read the 
following letter; so he wrote me yesterday that I might expect 
a paper by 10.30 this morning: 

Los Angeles, Cal., February 1, 1887. 
Z. P. Clark, Esq., President: 

I have, unwillingly, been forced to delay replying to your favor on the 
subject of the article for the next annual meeting; I really have been -worked 
day and night. 

You suggested a topic which I did not understand, and I wrote and asked 
you both here and in San Francisco, for an explanation. As none came, I 
supposed that you expected all the reports that you wanted, and, accord- 
ingly, I let the subject pass out of my mind. 

I am completely overwhelmed with business; it never was so brisk as for 
the past few months. I think of nothing to write about. I want to do as 
you wish, and it will pain me if I cannot, but in ten days I am scarcely likely 
to think of anything except the business just before me. If you will give 
me a hint, I will try to work it up. 


In writing on insurance subjects, I have proceeded on the principle that 
there exists a desire to do right, and to let sound business principles have 
some control. I have found (invariably, I think I may say) that the first 
and last thought is, more premiums, with an occasional spasm of fear of a 
loss. I am convinced that the less a local agent knows of the bottom facts 
of insurance, and the more entirely he is devoted to getting premiums, with- 
out regard to overinsurance, moral hazard, or anything else that might 
interfere with that one object, the better he stands with a vast majority of 
the high-toned offices. And I have reached the conclusion that it was a sorry 
day to me when I aroused the suspicion that I might have brains. When 
a general agent wants anything of that kind, he goes to a butcher-shop for it. 

I really think that the grotesque and the serious clowns who have been 
disporting themselves for the amusement of the Association were one too 
many, and I prefer leaving Lee the entire field, or ring. At all events, he 
enjoys it — I don't. Very truly yours, 


From Mr. Wilson, a well-known writer, I received this reply: 

San Francisco, Feb'y 6th, 1887. 
Mr. Z. P. Clark, Pres't Fire Underwriters of the Pacific, San Francisco, Cal.: 

Dear Sir — I beg to acknowledge your letter, in which you ask that I 
should "write something for the delectation of your Association at its 
annual meeting, to be held on the fifteenth instant." 

It is beyond the power of my supposed and imputed fancy to conceive by 
what enchantment you ever conjured up the forlorn idea of my literary 
talents. If in my boyhood I ever aspired to any such honor as this, it is so 
long since, that even the memory of that dream has perished. Having 
passed, in spirits, life's noon-mark, you certainly cannot expect me to cherish 
again those boyish fancies; and I trust you do not as yet take me to be in 
the dotage of my second childhood. Surely, these brethren do not wish to 
use me as the Philistines did a poor blind man of old, when they said, "Call 
for Samson, that he may make us sport.'' Are you heartless pagan Philis- 
tines, who wish to take advantage of the supposed blindness of my vanity, 
and set me up between pillars of criticism, to make sport for you ? 

If these brethren "underwriters " should ever have occasion for my fu- 
ture services, I must beg of them that they will lay on my shoulders 
some lesser burden than "to write something for their delectation." I as- 
sure you of my most loyal spirit to serve them in any capacity within the 
sphere of my ability. But. by all that is honorable and brotherly, do not 
ask me to create something out of nothing, in a less space than ten days. 
Accept then, these lines as an apology for a paper, which I regret I have 
neither the time or ability to produce. 

Thanking you for your kind letter, and trusting I shall be able to be 
present with you on your " festive night," as a spectator, 
I beg to remain, yours very truly, 



I have prepared this as my report: 


men of the Fire Underwriters' Association of the Pacific : 

The year 1886, with all its anxieties, its hopes and its disappointments, 
has come to an end. For the blessings it has brought us we are duly thank- 
ful; above all, we are grateful that no vacancies have occurred in our ranks 
through the hand of death. One or two have voluntarily fallen by the way- 
side—drifted into other and less vexatious professions. To them we bid 
God-speed on their new ways. The ashes of the year's burnings have wafted 
away; the clouds of smoke which dimmed the pages of our profit account 
have disappeared, and with resignations, variously emphasized, we settle 
our galled fronts, sides and rears back into the harness to continue the 

The year 1887, with all its burden of hidden mysteries and unsolved 
problems, is with us. Added to the legitimate causes for anxiety is the State 
Legislature, which is now considering a measure more despotic in its feat- 
ures than the most arbitrary ukase ever promulgated by Russian Czar; 
a measure making the existence of insurance boards felonious and this 
association of questionable legal status. And for what reason? Pelf! A 
few men who live by bribery and corruption, professional politicians — 
that name, a stench in the nostrils of decency, the " Third House " — have 
again gathered their greasy carcasses from the gutters of San Francisco, 
and from the saloons, dance-houses and slums of other localities, to re- 
new the cry of " cinch 'em " at the capital of this fair land of the sunset. 

These horse leeches have again fastened their slimy tentacles upon our 
individual and collective bodies, and their rumbling stomaohs, that have 
for twenty-four long months been strangers to aught but the bread of 
charity, demand sustenance of us by threatening legislation as deadly and 
many-barreled as a Gatling gun. In the wisdom of their necessities they 
haunt the resorts of our Representatives, with their hands behind then- 
backs, palm up, and price printed thereon. This stand-and-deliver policy, 
if pursued upon the highway, would lead to apprehension and incarcera- 
tion. On the plea that " necessity knows no law," these law-makers — 
these necessaries to a "rump" government — ply their traffic and enjoy their 

Tbe communities who send their representatives to Sacramento do not 
commission them to bar the way of legitimate pursuits, or clog the wheels 
of commerce; they sent them for the good of the State— for wise legisla- 
tion. But the professionals are of a different school — their ends being 
purely personal. To keep their bloated cadavers from shriveling in the heat 
of that land where insurance against fire is unknown, they expect insur- 
ance corporations, railroad corporations and capital to stuff their hungry 
maws and keep their inner membranes from beating the devil's tattoo 
upon their backbones — to prolong their worthless lives for more injuries. 


For this our principals are, in a measure, responsible. Had they, 
years ago, when called upon for money to defeat vicious legislation, 
simply said, as the Lord said to Adam when he fired him out of Eden, 
"go work for your living," this demand would not have become peren- 
nial. In the dignity of our indifference, we should have found strength. The 
bleeding gaps then made in our coin sacks would not now continue to bleed; 
and instead of trembling like aspens at every breath from the rummy 
mouths of these Solons, we should listen with wrapt pleasure to their 
scintillating wit, their well-rounded periods(?), their sublime nights of 
oratory. To you, managers and officers of companies, I say, pay them 
your ransoms; and when they have concluded their raids, and returned 
to their gutters and their slums, count up the cost, charge it to expense 
account, revise your ratings to cover it, and let the good people pay for 
the folly of their legislators. 

You, specials and adjusters, ask what interest you may have in all this. 
Only this: you are the men who meet with the people; you practically 
settle the fire losses on this Coast. Disbursements to claimants are 
governed by your advice. To you I say, do not let your resentment of the 
indignities to which a few men submit our profession incense you to 
such a degree that you cannot honestly and fairly deal with all cases 
placed in your hands. 

Insurance companies are not individuals. They are composed of thous- 
ands of individuals, distributed through all the spheres of life. The cap- 
italist, the laborer, the widow, the orphan, all have investments in our 
ventures, and depend upon our judgment and skill to bring to them the 
ordinary returns their money should earn. If we fail them, our places are 
filled, or our shareholders " wind up " and retire. 

It is an axiom of the business that a premium commensurate with the 
hazard must be realized to enable companies to live. If the measures before 
the present Legislature prevail, and rates shrink to non - paying bases,, 
you, gentlemen adjusters, will find a field for the display of your tactics, for 
the exercise of your peculiar qualifications. You will remember how we 
used to wonder why the loss ratios of the old so-called "non-boarders" varied 
so little from that of companies obtaining the * ' board rates." Some said it 
was because the "board companies" were disloyal; others had other rea- 
sons, but the solution was made by a good man, a bank president, now 
gathered to his fathers, who said, " A company must be paid for carrying 
its risks; if the rate is not sufficient, the loss must be reduced in propor- 
tion." I go further and say, if the panic is forced upon us, swear a new 
fealty to the "first law of nature," and let each loss be reduced in the 
same average proportion that our rates are reduced. You can here inter- 
pose your saving arms. Expense ratios must not be increased, as they 
surely would be by a decreased income. To prevent this, we should close- 
the doors of our Fire Patrol houses, dismiss the officers of our Inspection 


Bureau, and let the Fire Marshal seek his pay from the municipal 
treasury. Individual companies could hire the use of patrol coveis, and of 
the pump for particular cases, and by denying their use to the general 
public, compel that public to restore the lines they took away from us when 
the Patrol was established, and which has served the public more advan- 
tageously than the companies. 

To our venerable Presidents and managers I suggest we go still further 
— that we adopt the policy of the railroad corporations, and spend the 
money now extorted from us in placing our own men in the Legisla- 
ture, if any could be found to accept. Our companies represent hundreds 
of millions in assets, and about five millions in annual income in this 
State, surely figures of sufficient size to attract the respect of the public, 
as they do the cupidity of a few mendicants. We could save enough, 
by relieving ourselves of taxation and repealing the law establishing the 
State Insurance Department, to pay the expenses of a campaign. Pielegate 
the insurance business to the same laws that govern banking and com- 
merce and leave the fates of companies to the "survival of the fittest." 
and the experiences of the insured to his own good luck or his bad luck. 

After our creatures in the legislative chambers shall have "fixed" our 
affairs, let them turn loose on the "Grangers' Business Associations," 
" Stevedores and Riggers, " "Knights of Labor '' and Newsboys. Make them 
dissolve their associations, or go to jail; make servant girls' unions a 
"fellow-ny;" make it unlawful for them to agree with the butcher, the 
baker, the candlestick maker as to what your bills shall be at the end of 
the month. This done, the millenium is with us. 

We now turn to the legitimate hazards of the profession. I think it was 
Jim Keene who said, when asked how to buy stocks, "Buy 'em low and 
sell 'em high." These words have made Keene's name immortal. I seek 
immortality in words of a similar import. Sell your policies high and buy 
'em in low. Get risks at good rates. All risks are good; all inadequate 
rates are bad. The elements which dictate an adequate rate are varied, and 
not fully known. Some few more enterprising, more favored underwrit- 
ers, are possessed of experience statistics of a score or more leading com- 
panies extending over a period of many years, showing the average cost 
of 300 or more classes of risks in the United States. These tables deal 
only with amounts written and amounts paid out, and furnish the cold-blood- 
ed cost of each. 

This is valuable as a matter of general information, but fails of importance 
in the government of the affairs of particular companies in particular fields. 
While combined experience shows the cost of quartz mills to be 3 per cent, 
and the cost of sugar mills 2J per cent., it would be no guide to the hazard 
of a quartz mill in the balize of the Mississippi or a sugar mill in the mount- 
ains of Nevada. While they serve as general guides or indicate points of 
rest, bad judgment in selection or irregularity of limits may upset results. 
For instance: 


"A" writes $100,0^0 on woodworkers in 50 policies of $2,000 each, premium $10,C00; 
two burn, costing "A" 40 per cent.; profit, $6,000. "B" writes same amount on same 
risks in 50 policies of $1,000 to $5,000 each, premium $10,000, On the two which burned, 
"B" had $10,000; profit, nil. " C" writes same amounts on same risks as "B," but hap- 
pens to have but $2,000 on the two which burned ; profit, $8,000. With the same total at 
risk on the same risks, and with the same compensation, some lose while others make. 

While the combined experience of the three shows the cost of the 
hazard to be but 5J per cent., the companies obtain 10 per cent.; but of 
what value has this knowledge been to "B?" Had it been a short day 
with him when he wrote the policies, he might have lost 200 per cent. 
We must seek our profit through a thorough knowledge of the industries, 
the prosperity, and the prospects of each specific field. Local iufluences, 
such as too much rain, too little rain, too much frame range, and a desire 
for more brick, regulate the cost of insurance in that locality more pos- 
itively than the combined experience of all the companies of the United 
States. This knowledge of the material and moral composition of each 
field is obtained through you special agents. When you have carefully, 
thoughtfully, honestly furnished your chiefs with your surveys they cart 
from them dissect the town and measure its capacity for profit, and estimate 
the hazard more accurately thau *• combined experience" can possibly en- 
able them to do. 

To measurably overcome the disarrangement of ratios through irregular 
limits, each company should adopt its maximum limits, and never exceed 
them, and these limits should be measured by some system having 1 for 
its base. If it adopts $5,000 as its limit on a 1 per cent hazard, $1,000 should 
be its limit on a_5 per cent, hazard; as the hazard decreases, increase the 
maximum in like proportion. Possessed of this knowledge, through which 
adequate rates are made and working from a system of maximum limits, 
it would seem that insurance companies should prosper, and that the 
public should get its insurance at minimum rates. 

The future of the Coast is bright. The increase in population is healthful, 
the growth of values is decided, and the character of buildings daily improv- 
ing. The completion of the Panama Canal (which is a future fact) will 
give us European imports by sea nearly as quickly as they can be laid down 
in New York at the same if not a less cost than to New York dealers. Ships 
being assured of return cargoes from our wheat warehouses, will be able 
to reduce charters both ways. The shortening of time between this 
port and the United Kingdom will bring our market almost if not quite 
up to quotations, and prove of immense profit to producers. With this 
general expansion our business will expand, with this growth we shall 

Retrospection reveals vast changes in the methods of our profession, 
since twenty-two years ago, when I assumed the dignities of local agent 
at Nashville, Tenn. Coming from the field of Mars, green in years and 
callow of mind, but grim of cheek and hard of brawn, I entered upon 
the tempestuous sea of underwriting without a tariff for compass or experi- 


ence for a rudder. I made my rates and wrote my policies by the same 
rule that governed the old Wisconsin pioneer in making his sapling sled— 
M by guess and by gosh! " 

Within the limits of the scenes of battle, surrounded by the extraordinary 
hazards following in the wake of civil war, the business was one of great un- 
oertainty as to results, and the visits of specials were looked forward to 
with intense longing. Among those who visited us in those fiery days 
was the successful, brilliant Bromwell, always breezy, always welcome. 
Bromwell was a handsome young fellow then, and caused many a heart 
within the bosoms of the fair belles of middle Tennessee to beat faster un- 
der the influence of his sunny nature and sparkling wit. What he didn't 
know about underwriting then would fill a large volume — what he thought 
he knew, a larger. I remember an argument he once had with a claimant 
at what was then known as the "half-way house" between middle and 
north Nashville, in which he was badly worsted. The discussion was on 
the proper depreciation chargeable against a counterfeit $20 greenback. 
Not being a question for arbitration, the adjuster had the alternative 
of allowing a total loss or getting a thumping. My memory says he not 
only paid in full, but got "fired" down the front stairs. The claimant was 
of that unfeeling class, the last and best creation, whom I advise you 
young specials to avoid. 

I trust I have not written anything ever written before, and that if I have 
you will not tell me of it. Should you be able to mould any of the crude 
material herein into beautiful shape, I shall pronounce you the superior of 
Yours, Z. P. CLARK. 

The President then resumed the chair. 

The President — The next in order of business is the report of 
the Executive Committee, Mr. H. K. Belden, Chairman. 

Mr. H. K. Belden then presented the following report: 

Mr. President and Members of the Association of the Pacific: 

Gentlemen — The former reports of jour Executive Committee have been 
conspicuous for their extreme brevity; a precedent having been thus estab- 
lished, your Commiitee which has acted during the past year has not de- 
parted from the usual custom. 

We have to state that the account of your esteemed Secretary and Treas- 
urer has been duly audited and found correct. The balance on hand, as 
shown in his report, is not large, but as there has been no unusual demand 
made upon the funds of the Association, its income has proved sufficient. 

No other business requiring mention having come before us, our report is 
respectfully submitted. 

HENRY K. BELDEN, Chairman. 


The President — If there is no objection the report will be re- 
ceived and placed on file. While we are waiting for Mr. Mul- 
lins, we will have a paper from Mr. A. J. Wetzlar on the sub- 
ject " Does it Pay?" 

Mr. A. T. Wetzlar then read a paper on " Does it Pay? " 


I had no doubt, Mr. President and gentlemen of the Fire Underwriters 
Association of the Pacific, when I wrote this heading that upon reading the 
same to you, I would at once arouse your curiosity — not that the query re- 
ferrrd to is particularly patented by me, but that, as considered from an un- 
derwriter's standpoint, the subject can be made to cover so wide a range as to 
make a thousand essays on the subject an easy matter of thought. 

In the limited time I have had to prepare this paper, I can only delve in- 
to the subject, where it concerns underwriting, in an incomplete manner, 
and simply open the door thereby for future discussions upon subjects 
which none of you can fail to appreciate. 

The all-absorbing topic of conversation among insurance men, for the 
past few weeks, has been the subject of insurance legislation, as under 
consideration by the law-makers of our great and glorious State, at Sacra- 

The wise h^ ads and managers, with long addresses and rolls of statistics, 
have appeared at various times before these honorable legislative committees 
with carefully-studied and prepared arguments, and have, by actual demon- 
stration and statistics, arduously labored to convince the various members 
of said committee that the insurance business on this coast has been not 
very lucrative; that the property-owners should consider themselves happy 
in the thought that rates through union were no higher, but that, as now 
established, additional security was assured them by the consequent increase 
of the assets of the companies; and in polite words, that it were well enough to 
leave the conduct of the insurance busines to the underwriters, who, no 
doubt, must be best fitted to manage it. 

Now, in all candor, gentlemen, I ask you, does this pay? The pen-picture 
may be somewhat rudely drawn, but permit me to show you the negative 
side: A lot of men, some of whom are politicians or lawyers, are elected, 
oftentimes, not by the property-owning, law-abiding, intelligent and orderly 
citizens of the community, but by ward strikers, rock - rollers, political 
vagrants and nondescripts (whom, at any other time than at elections, 
they would be ashamed to classify as their constituency), and they seek 
legislative nominations assiduously, year after year. It has become a busi- 
ness and a study with them — not to benefit their country, but to make all 
the money out of their positions possible. For that reason they cater 


to the public hue and cry against corporations of any prominence, and adopt 
the rabble system of yelling monopoly against all corporations who fail to 
plaster their sticky palms with " mint salve." Demagogues and would-be 
statesmen, their assumed righteous indignation can be easiest measured for 
or against any proposition by the depths of their pockets. 

And again I ask, does it pay? Does it pay the companies, session after 
session, to have to continually grease the wheels of legislation against the 
continual onslaught of cinch bills introduced by the Honorable So and-so, 
simply as a flyer for " mint salve " ? 

To my mind, it does not pay to attempt to convert a jury by argument 
and a statement of actual facts, when the jury, upon being empaneled, has 
already decided upon its verdict. Figures are what they want; but they 
want them on large, round, yellow discs, and that plentifully. 

Does it not strike you, gentlemen, that as vast an army of men (and 
that men of intelligence and brains) as the insurance business embraces, are 
certainly entitled to representatives of their own in the legislatures, and 
that, by united action, they not only can defeat these would-be statesmen 
in their extortionate attempts, but have sufficient honest representation 
to extinguish these leeches on the public, and render our State a service? 

The kaleidoscope turns; we now get another view. Does it pay to con- 
tinually fight against a valued policy on real property, when the very power 
of control rests with the companies themselves; to, in consideration of an 
increased rate of premium estimate the actual cash value of such real prop- 
erty at the time of accepting the risks, rather than after the happening of a 
loss ? True, such policies should be written only for the term of one year, 
and the builder's estimate by a competent employee of the company at- 
tached to the application; but it strikes me that such a departure is en- 
tirely practicable, even in remote towns and cities wherever an agent can 
secure a competent builder to make such estimate and certify to the cor- 
rectness of same under oath, then the company could write the risk at say, 
two-thirds the valuation so estimated. 

Now a fire policy comes in sight. Does it pay, gentlemen, to waste so 
much paper, by filling it up with a quantity of fine printed conditions, one- 
half of which have been time after time upset by the various Supreme Courts, 
and certainly could not be sustained in any Court? Would it not pay better 
to draw up a policy form short and concise in language, consistent with the 
law and actual intention of the business? 

I think I see some of the wise old heads shaking dubiously, but, gentle- 
men, this is a progressive age, and you all know that as a hypothetical 
case, when a poor devil insures his furniture, he calculates, intents, and be- 
lieves his entire personal effects (except wearing apparel), are fully cov- 
ered. And this is where the root of all the evil lies. We like to be specific 
and to detail everything possible, whilst our printed contract forms are in 
themselves absolute negatives. Do you want to adhere to these fossilized 
ideas of years ago, or work onward with the flood-tide of improvements and 
civilization? This is what I ask you, gentlemen, to consider if it pays? 


Next the adjuster turns up; and I cannot refrain from again asking you, 
gentlemen, does it pay to let clerks and inexperienced men adjust and handle 
losses? It may pay you, gentlemen, as agents, and help to reduce your ex- 
pense accounts, but how does it affect your contingents? And does it pay 
your companies? Is it not a fact that home offices have frequently of late 
called attention to the loose manner in which losses are settled on this Coast, 
and would it not therefore pay better to cease being " penny wise and pound 
foolish/' aud employ only competent men to honestly interpret your con- 
tracts and perform such duties? 

And now for the broker, whom you all do p?t. Does it pay to accept 
country risks through him at full commissions, without submitting such 
business to the inspection and supervision of your local agent, who perhaps 
previously, for the best of reasons, had declined the same? Would it not 
pay better to reduce the broker's commission on such country business, 
and pay the local agent a small commission for his supervision? 

Does it pay in the competition for business, to accept risks and issue 
policies on apparently large and handsome brick or stone buildings in 
course of construction, which are absolutely pure fire traps, with "nary" a 
brick or stone wall or partition inside? Where does the usefulness of the 
Inspection Bureau come in, if you do not refuse absolutely to write such 
risks (unless the structures are properly built), and aid the Bureau in every 
way, so as to make its work effective? 

Does it pay to go along year after year without properly classifying 
hazards and kesping statistical records of your business? With 1% percent, 
profit in the business for the past ten years, I should think not. 

I could continue these queries for hours, but feel I am, perhaps, exhaust- 
ing your patience. I therefore offer you the these few " conundrums," not 
particularly as ideas of my own, but as prominent subjects for discussion 
and thought. " Truth, tho' hard to hear, strikes deep;" and in my desire 
to benefit the profession I may strike old and sore spots, but let us out with 
it; and putting shoulder to shoulder, sink individuality, and manfully labor 
by careful work and study to improve our profession and lighten each oth- 
er's labors. 

Thanking you for your kind attention. 

Youis truly, 


The President — If there are any points in these papers that 
are to be discussed, let the discussion follow the reading. We 
will now return to our regular programme, and listen to a paper 
from Mr. C. F. Mullins on " Local Agents. " 

Mr. C. F. Mullins— The day after I had prepared this paper, 
the Coast Review was issued, and, in speaking of our coming 
annual meeting, remarked that these who had papers to prepare 


for reading should not read up the previous papers on that sub- 
ject, and also that they should not consider their subjects thread- 
bare. The first advice I had followed — I had not read up the 
former papers — but as to the second, I did rather consider that 
I had a threadbare subject in that of " Local Agents." 


The subject has been such a battle ground for discussion and text for essays 
that it is very threadbare, and hard to write about with any degree of sat- 
isfaction. I thought of looking at the papers that have been read before 
your Association on the same or similar subjects, but abandoned the idea, 
feeling satisfied that I should find nothing left for me to say, and although 
I shall be compelled to reiterate truisms, and repeat self - evident facts, it 
is perhaps best I should state them in my own way, which is the only chance 
I have left me for avoiding involuntary plagiarism. 

The remarks I may have to make, being commonplace, will be better 
without any attempt at the rhetorical art so often misplaced both in the 
present and the past, and so effectively rebuked by Canon Farrar, D. 
D., who, in speaking of authors and orators in the times of Seneca, says: 

"This age of oratorical masters was emphatically the age of decadence and decay. There 
is a hollow ring about it, a falsetto tone in its voice, a fatiguing literary grimace in the 
manner of its authors. Even its writers of genius were injured and corrupted by the 
prevailing mode. They can say nothing simply; they are always in contortions; 
their very indignation and bitterness of heart, genuine as it is, assumes a theatrical 
form of expression. They abound in unrealities; their whole manner is defaced with 
would-be cleverness, figures and tricks of speech, straining after originality and pro- 
fundity, when they are merely repeating very commonplace remarks." 

Now that I have burned the bridge of rhetoric and precedent behind 
me, let us consider, in a matter of-fact sort of way, what a local agent is, or 
ought to be. 

At the outset, I wish to express the firm conviction that, as a class, the 
local agents of this Coast compare most favorably with any other class in 
the business community, which, in the nature of things, is readily account- 
ed for because of their being a selected class of men, for a specific purpose, 
requiring at least a full average of intelligence and integrity. 

It has sometimes been said that the local agent is the foundation of in- 
surance. It would however appear that capital and the need of indemnity 
from loss form the foundation. The local agent holds a place of honor, and 
is a most vital factor in the insurance world. Each and every one of them 
are foundation stones of greater or less importance in the successful con- 
duct of our business, and each defective foundation-stone imperils more 
or less the superstructure we are engaged in building for the profit of 
our respective companies. The local agent is the main support of a com 


pany for premium income. He is almost the sole source a company has 
for avoiding risks of a bad moral hazard. To a most important extent 
must we rely on him to avoid granting overinsurance. His assistance is 
required to aid in securing proper fire extinguishing apparatus and water 
supply. He is expected to a certain extent, to keep watch upon the risks 
he may have sent his companies, that they may not retrograde morally 
or materially while on the company's books. He has to be the adviser (rep- 
resenting insurance capital) of his fellow townsmen as to the best method 
of constructing their buildings, having regard to the practical opportunities- 
they may be surrounded with. These remarks apply more or less to 
all local agents, but especially those in the more important cities aud 
towns. In the smaller towns, only part of these requirements are- 
needed, and a good agent need only hold the respect and confidence of the- 
community where he resides, with the intelligence to carry out the in- 
structions of his company, industry and perseverance in soliciting business 
from his acquaintances, and brains enough to know that he does not know 
more about insurance than the company he represents. 

To be brief, some local agents are devoid of every requirement to make 
success, their sole merit being underhand champions for getting premiums. 
When all things are equal, as to rates, no rebating allowed, these 
men sooner or later rind their level, and drop behind, both in business for 
their companies, and income to themselves, and as drowning men will 
catch at straws, so will these men resort to trickery, rebating, etc., for 
business. Now while these men are few in number, their appointment 
and continuance are the beginning and end of the difficulties met by insur- 
ance companies in the conduct of their country business, for these few 
agents, who are exactly what they ought not to be, poison the entire 
agency system of the country. 

A paper on Local Agents can hardly avoid touching on the subject of 
remuneration. Direct and contingent commissioos have of late been dis- 
cussed very thoroughly by their respective friends, and I am of opinion tbat 
companies cannot afford to pay more for business than they are now 
doing, without increasing rates, and that the public will not stand. 
Higher rates of commission will not benefit agents; it merely serves as a 
stimulus to increase the number of agents, and lessen the premium in- 
come of each agency, and consequently the personal income of each agent. 
It also serves to give some agents a margin for rebate, still further to the 
prejudice of good agents. I think, as a whole, agents are as fairly paid 
for the business done as other classes, and as a whole they are satisfied. 

The principal trouble under this head comes from the agent who starts- 
out on the basis that the business owes him a living. This would be a 
proper assertion, if the obtainable insurance in the community justified 
such agent giving the whole of his time to the business, and my experi- 
ence, extended over the entire United States, shows that competent agents,, 
under such circumstances, do get a living, and in many cases an exceed- 


ingly good one. But that insurance owes a man a living in a small country 
town, where business is limited and competition great, cannot be considered 
for B moment; it must be used in connection with some other industry. 

Perhaps I am expected to confine myself to the local agent, but I shall 
take the liberty of going a little further, by considering the special agent, 
as far as relating to the influence he has on the local agent, which should 
peat. The special agent selects the local, and educates him to a great 
extent. I have likened the local to the foundation stone; the same line of 
reasoning leads me to look upon the special as the builder. Now a 
superstructure of any strength or permanence cannot be built where 
the foundation stones are of bad quality, badly shaped, or cemented to- 
gether imperfectly. First, then, the special must be careful in selecting the 
right kind of material, and then so shaping it that he is sure he has not 
made a weak spot in the structure he is building. The special has, to a 
greater or less extent, (according to the wisdom of the head office) more 
or less pressure for retaining, if not increasing, present connection. 
I have stumped the field under same conditions, and have visited town after 
town, discouraged at my inability to secure proper agents where we were 
not represented. I could at any one of the places have insisted on making 
appointments in the hands of agents who had all the companies they 
wanted, or inferior men who would take anything on their own terms; but I 
knew neither the company nor myself would finally profit under such 
conditions, so if I could not find the right material, I p tssed on rather 
than damage good work I had done by reducing the average quality. By 
leaving the company in the hands of a good agent who did not want your 
company, either your business must be too small to pay, or you must ac- 
cept the inferior risks that other companies do not want, or in the absence 
of agreement pay higher commission than the business warrants, all tending 
to produce poor results. On the other hand, leave it in the hands of an in- 
ferior man, and you may rely upon it the general average of the business re- 
ceived from him will not be superior to the source supplying it, viz: himself. 
I may perhaps claim some degree of success in the insurance business, 
and a very large part of it I attribute to a rigid non-intercourse with a 
class of agents of indifferent business character and ability, who will do 
nothing except their own way. 

The special agents who will in the long run come to the front, are those 
who will never appoint a man unless of good character in his community, 
who has other business enabling him to gain a livelihood outside insur- 
ance, unless the field and opportunities for insurance are large enough to 
support him. I know it is discouraging to withdraw from an agency, but 
the time and money spent on agencies that do not and cannot be made to 
pay, if expended in other directions, where you possess the right material, 
will much more than counterbalance the loss. Mind, I do not discourage 
small agencies, if so located as to be conducted on a paying basis, and you 
have the right material for an agent. What I wish to impress on you is the 


fact that it is not necessary or desirable to be represented anywhere, un- 
less we can get the right man, and that does not mean a man having merely 
a glib tongue and a controller of premiums at the expense of moral haz- 
ards, overinsurance, etc. 

A word or two as to head offices. As the agent is one of the foundation 
stones, the special ageot the builder, so in due course we come to the arch- 
itect and supervisor of the whole, who is one or more of the officers, be he 
President, Secretary, general agent, manager, or what not. The plans and 
specifications are theirs. If they employ ignorant or vicious builders, who 
select bad material, they will pay for it in the end. Since 1860, there have 
been 592 companies, representing over $81,000,000 of capital in the United 
States, retired from business. Well, nearly 200 went out with the Boston 
and Chicago fires; some were bogus, but fully half of them went out of ex- 
istence because the superstructure fell about their ears on account of bad 
material in the foundation stones. 

As an illustration of what I mean, I may say that any one of you knowing 

that Mr. ■ had represented the conservative company for five 

years, would freely give him your agency, if he wanted it, and you were not 
already well represented, because you know the architect and builder of 
that company select good material. On the other hand, you know that 

the fact of an agent being the favored agent of company w T ould be an 

absolute bar to his appointment for your company. 

This brings me to a close, with the remark that local agents are what their 
companies and special agents make them. The company that spends its 
time abusing its own agents, enters up judgment against its own manage- 

To those gentlemen (and there may be a few among you) who think this 
paper consists of words only, and that the agent who gets the most premi- 
ums, regardless of methods used, is the beginning and end of your desire, 
will find the old proverb come true, that — 

♦'They who lie down with dogs will get up with fleas." 


During the reading of his paper Mr. Mullins made some ex- 
temporary remarks that upon the motion of Mr. Chalmers were 
ordered printed in the records of the Association. They were 
as follows: 

C. F. Mullins — I might pause here and say, that if all of us, 
during the next month or two, would get a little backbone into 
ourselves and aid one another in improving the business by vis- 
iting our agents and ascertaining whether we have got, as I said 
in this paper, any agents of simply one idea, and that the 


company should get premiums irrespective of anything else — if 
eveiy one of us, as we are traveling around these valleys, would 
spot these men and sacrifice a few dollars here and there in pre- 
miums, give and take and uproot these men (there are not very 
many of them, but they abuse the entire business of the coun- 
try), we should brace up a little and get rid of them by con- 
stantly shipping one and another until we shall find the country 
business of insurance companies in a better condition by the 
time we get through. 

I think we all of us have been met with the statement that the 
c< business owes the man a living." True it is that where the 
business keeps a man's entire time, and where he looks after 
and works for it, he will get it; but in a small country town, 
because a man devotes his time to insurance as far as it goes — 
that is to say, where he could work but one hour a day and at- 
tend to all the business he has got to do in insurance, and puts 
in seven or eight hours on the bottom of his chair wearing the 
seat of his pants out, and he calls that putting in his whole time 
at insurance — it does not owe him a living. 

Every one of you, if you will run over your agents and look 
at the class of risks that you have got, particularly when it comes 
to personal inspection, you will find that the extreme danger is 
from the migratory man who moves from here to there — the fel- 
low who is going to make a trial of it, to see what he can do 
with nothing behind him, with no standing in the community — 
nothing at all. Every time you employ such a one you have the 
poorest class of business. Where you get your business is 
where you have a man that is well thought of in the community. 
He has a character. And so I say, in the appointment of an 
agent you can never look for business of a higher character than 
the social standing of the agent and his character. 

The President — It is certainly a very valuable paper and the 
accompanying remarks should be preserved. Of the remainder 
of tae Committee, Mr. Cofran is absent in the East, and Mr. 
Wilson is not now present, so we shall have to pass by those 
two gentlemen for the present, and come to a paper upon the 
subject of " Forms of Policies." Mr. Ferry, the Chairman of 


the Committee, is not present, but Mr. Faymonville is. We 
should like to hear from him. # 

Mr. Faymonville responds to the call and reads from manu- 
script as follows: 


Mr. President and Gentlemen: 

I approach this subject with a full realization of my inability to do it jus- 
tice. Indeed, it may seem presumption on my part to even venture an opin- 
ion, to say nothing of criticizing, a form of policy which, there is every 
reason to assume, is the crystalization of long experience, faithful study and 
intelligent conclusions on the part of the honorable committee who have 
had the matter in charge; but, the task being mine, I shrtll consider it my 
duty as a member of the Association to at least make an attempt, though I 
-doubt not that ere I have finished the picture of the boy who had " bitten 
off more than he could chew," will have presented itself to your minds. 
Whatever I have to say on the subject may not prove new to many of you, 
nor do I advance any propositions which I expect you to accept without 
thought or reflection, but merely submit them to you for consideration. 
The general proposition of a standard form does not strike me favorably. In 
these days of invention and progress, when thousands of brilliant minds are 
in competition, each struggling to be foremost in the discovery of new 
agents of destruction and construction; when all known elements are being 
utilized to yield power, light and heat, who can tell what hour may give birth 
to a discovery or an invention which will place before us new hazards to 
guard against — hazards which now lie hidden and unknown? Under a 
standard form of policy, the methods of protecting ourselves by adding new 
clauses and conditions to our policies, or changing old ones as necessity 
may arise, is virtually taken from us. 

But to revert to the policy in detail: 


The clauses in the "standard" policy, with reference to closing down 
manufacturing establishments, and referring to mechanics' privileges, are 
as follows: 

" or if it cease to be operated for more than ten consecutive days or if me- 
chanics be employed in building, altering or repairing for more than fifteen days at 

uny one time" this policy shall be void, etc. (Lines 14 and 16.) 

Now, do these clauses mean enough to be of any material benefit to the 
-companies ? The establishment insured cannot be closed down for more than 
ten days at one time; but if the premises be operated each eleventh day, or 
about thirty-five days in the year, it may remain idle all the balance of the 
time, or about three hundred and thirty days. 


The lack of stringency is quite as noticeable in the clause which refers to 
repairs. Mechanics are not to be employed in building, altering or repairing 
for more ftian fifteen days at any one time. As a matter of fact, does not 
this clause give permission for perpetual repairs? inasmuch as mechanics 
iv -t from labor on Sundays, so that they are really never employed for 
more than six days at any one time; or, should it be held that keeping the 
Sabbath is not a break in the employment under the terms of the policy, 
could not work be purposely discontinued on each sixteenth day, and thus 
evade the clause? To the writer, these clauses seem inadequate. 


In lines 36 and 37 we find that ' ' if a building, or any part thereof, fall, 
except as the result of fire/' this policy shall cease. You will notice that the 
words, "or become untenantable," have been omitted from the policy. This, 
I think, would be found to be a grave mistake, should the " standard form n 
be adopted for use on this coast. 

By reason of our wet winters, many buildings, both in California and 
Oregon, are rendered totally worthless and unsafe on account of softened 
foundations and crumbling walls. The writer himself once journeyed to a 
southern town to settle a loss, which upon investigation he found to be on 
an adobe building, the walls and foundations of which had been so weak- 
ened by a recent flood that it was in imminent danger of falling down; in 
fact, the walls bad "spread" to an alarming extent, and the proprietor 
had vacated the premises five days before for fear of being buried alive, 
when a convenient fire came along and burned the place. Now, the build- 
ing had not really fallen, nor had it been vacant long enough to avoid 
the policy on that account, so that under a New York "standard form "" 
the company would have been obliged to pay for a building which was 
worth nothing whatever, as subsequent expert testimony was to the effect 
that the structure could not be repaired, and the expense of taking it down 
would be more than the value of such material as might be saved. Such 
cases are not unusual on this Coast, so that the omission above referred to 
might prove a serious matter here. 


That part of the policy (lines 67 to 69) which refers to the notice of 
loss has, among others, the following requirement: 

" the insured shall make a complete inventory of the same (referring 

to personal property), stating the quantity and cost of each article and the amount claimed 

We can but regard this last requirement (as to the amount claimed) as 
unwise; in fact, from personal experience we have always found it advisa- 
ble to prevent the assured doing this very thing. We have always been 
able to obtain a much fairer settlement where no preliminary figures as to 


the damage have been made by the assured. It is a well established fact, 
borne out by the experience of most of you, that it is very difficult to- 
combat a statement of damage, already "cut and dried," in the hands of the 
assured. Does not the assured, no matter who he is, feel that it is casting 
a reflection on his judgment or honesty to question the correctness of 
any definite claim for loss that he may make? And, again, does not the 
assured's pride often prevent satisfactory settlements? Having made a 
claim in figures, he may feel too proud to back down, even though the 
adjuster has proven to him that his claim is exorbitant. We therefore fetl 
that the adjuster should always, if possible, be on hand when the first 
detailed estimate of the loss is made, and thus help fix that first impression, 
which often cuts an important figure in the settlement. Any opportuniiy 
which the assured may have to form a fixed ante-adjustment opinion is tc* 
the company's disadvantage, and any term in the policy compelling him 
to fix a damage, before the adjustment, is, to our thinking, extremely ill- 


Another matter which presents itself upon reading the " standard form" is- 
the absence of any clause under which the companies may demand that 
appraisements be made in detail, or item by item. Of course it has the pro- 
vision, above referred to, requiring the assured to make up an itemized 
statement, but nothing in the policy that we can find makes it obligatory 
on the part of the appraisers to render, if required, their award in detail. 
We need hardly explain the full significance of this omission to those of 
you who have had "lump " appraisements forced upon you. 

While the "standard form" does not cover awnings, it does not except 
opium as merchandise, wooden (over fire-proof) roofs, plate glass of any 
dimensions, nor decorations. The insertion of the word "entire" in the 
eleventh line of the policy is, we believe, an excellent feature, inasmuch 
as it renders the whole policy void, if, by the operation of the terms of 
said policy, the insurance on any one item should be voided. The clause 
found in the twenty-ninth line and under which the policy is voided if the 
building insured becomes vacant, whether same is intended for occupancy 
by owner or tenant, is also a good one, as under the older forms courts have 
held that vacancies were contemplated where buildings covered by poli- 
cies were intended for occupancy by tenants. 

The clause requiring the company to give assured five days notice of any 
intended cancellation is of questionable advantage. In cases where no fixed 
period for notice was specified in the policies courts have generally held 
that the notice to the assured of intended cancellation must be "rea on- 
able," at the same time reserving to themselves, or submitting to a jury the 
question as to what constituted "reasonable notice." The clause referred ta 
was no doubt intended to remove the question as to what constituted "rea- 
sonable notice" beyond the discretion of courts and juries, and the in- 
tention is a very worthy one. But if a specified notice of Jive days will 


accomplish this, why would not a shorter notice accomplish the same 
object ? As a matter of fact, is not a notice of five days too long? We fee 
that the privilege of cancellation is to the insurance companies what the 
pistol is to the frontiersman — we may not "want it often, but when we do, 
we generally want it badly," and, we might add, "without delay. 

W hat is the main cause for cancellation? Some circumstance which may 
have a bearing on the moral hazard of the risk, is it not? Increases 
in the physical hazard can generally be met by an increased rate, but when 
we feel that the moral hazard may be affected we generally desire to get off 
a risk at once. Would not a five days' notice of cancellation in such a case 
have a tendency to precipitate crime, by giving the assured time to realize 
on his old policies, and thereby save the trouble of getting new ones? 
Of course, a loss occurring under such circumstances would naturally 
be regarded with suspicion, but what does that amount to if the companies 
could not prove criminality and the assured got his money? 

Following closely upon the cancellation clause, we find in lines 47 and 
48 the following: 

"In any matter relating to this insurance, no person, unless duly authorized in writ- 
ing, shall be deemed the agent of this company." 

A mere disclaimer, as it were, denying liability for the actions of un- 
authorzed parties, but which does not fix the responsibility of such actions 
on the assured. It falls far short of what is so often required on this 
Coast, where brokers frequently place risks a full thousand miles awaj', 
risks which must be taken, if taken at all, entirely upon the broker's repre- 
sentation, and where the broker transacts all business pertaining to the 
placing of said risks. We know how difficult it is to legally shoulder the 
responsibility of the broker's acts upon the assured, but would it not have 
been well to have made the attempt, and while the matter was under consid- 
eration, to have endeavored to construct a clause making a notice of cancel- 
lation binding, if served on the broker who placed the risk? 

How many are there of you who have not, at one time or another, desired 
the cancellation of a policy covering a risk located in some distant State or 
territory —a risk which, perhaps, had drifted on to your books through 
the hands of a broker, as risks will — only to find the cold, uncomprom- 
ising fact staring you in the face, that said policy could not be legally can- 
celled without the expense and trouble of a "reasonable" notice, and a 
tender of return premium to the assured, personally, in a far away country. 
It may be urged that it is not within the limits of lawyers' wisdom or wit 
to construct a clause making notice of cancellation binding if served on a 
broker, but we question the weight of this argument. 

From the foregoing remarks I do not wish you to infer that the " standard 
form " contains nothing commendable. If my comments should seem hyper- 
critical, let me assure you that it was an easier task to enumerate the few 
apparent weaknesses of the " standard form " than to recount the many ad- 


mirable features which can be found therein. Many of the clauses are so 
well constructed, and their advantages are so subtle, that they would require 
more talent than I possess to do them justice. Nor do I think that you have- 
time to listen to an account embracing all the desirable points of the "stand- 
ard form," as these discussions are either tiresome from the beginnings or 
are easily made so^by being long drawn out. 

I cannot "give you a rest," however, without reproducing a suggestion 
recently made by one of the foremost underwriters of the East: Now that 
arson is so fashionable, companies should be compelled to print on their pol- 
icies the law against this innocent little pastime. Is it not cruelty to the 
festive incendiary to allow him to grope along in ignorance of the possible 
consequences of his doings? And, as an additional warning, instead of print- 
ing on policies spouting volcanoes, lithographic cataracts, impossible Arabs, 
wooden-headed deer, or abandoned-looking goddesses — all of which signify 
nothing — let us have, say, in the foreground a neatly - executed gallows 
frame, with a slip-noose dangling in the " sky;" or a view of the State's pris- 
on, properly garnished with grated windows, framed in as it might be with 
a bordering of hard -tack and handcuffs. Surely, it is high time that the 

ornamental should give way to the useful. 


Mr. Faymonville — I thank you, gentlemen, for your attention. 

Mr. Chairman — I think we are indebted to Mr. Faymonville 
for a very able and excellent paper. His discussion has been 
thoroughly cut, and with a clean knife, and I shall be pleased 
to discuss at this afternoon's session some of the salient points 
of it. It is now about 12 o'clock, and, as there are several more 
interesting papers to be read before the production of the Knap- 
sack, I think it would be advisable to take an adjournment till 
2 o'clock. 

Whereupon an adjournment was taken until 2 p. m. 

Afternoon Session, 

Tuesday, February 15, 1887. 

On calling the meeting to order, the President said: The next 

thing according to our programme is a paper by Colonel Kinne 

on " Spontaneous Combustion," but he is not in town, and to 

fill in we will call for a paper from Mr. M. R. Hook, to be read 


by Mr. Farnfield, upon the subject "From a Local's Stand- 

Mr. C. P. Farnfield then read the paper of M. E. Hook. 


Ked Bluff, Feb. 8th, 1887. 
Mr Pr(sident, and Gentlemen of the Fire Underwriters' Association : 

At the request of your President that I should write something pertaining 
to insurance from a "Local's" standpoint, I therefore have the honor to 
submit a few thoughts as they occur to me. 

Your Association is about to assemble for its eleventh annual meeting, and 
I hope there will be no "vacant chair," and that your organization may 
continue to grow and prosper in the future as it has in the past. 

The year just gone by has added another page to the history and glory of 
the noble profession of insurance, in which you are all engaged. 

I know of no trade or profession that merits and receives the public con- 
fidence so entirely as that of insurance. In all my intercourse and corre- 
spondence with managers and specials during my seven years as a "local," I 
have found them, as a rule, high-minded, honorable gentlemen — men who 
would spurn a bribe, and never seek to avoid the payment of a honest loss. 

As to "Locals," there are many kinds. First is he who " knows it all " 
— adjusts his own losses and pays within three days' time. Then there is 
he who carries his register in his pocket, and has his office on the curbstone. 
Then the merchant local, who cannot let the opportunity pass for saving 
the commission on his own stock, and therefore solicits and accepts the 
agency of some good company, whose business in that town is circumscribed 
to that one risk — pos-ibly it may include his " uncles and his aunts." Then 
we have the local who makes insurance his business. 

It would, indeed, be strange, Mr. President, if these various agents did 
not use various means to procure business, spurred on, as they are, by the 
cry from ye manager. "One new risk;" yet I cannot see why that one 
new risk cannot be secured honorably and honestly, without lying and 
misrepresentation of rival agents, or the companies which they represent. 
Why not be as honest and honorable in the pursuit of this business as in 
merchandising or any other pursuit of life? I believe that managers and 
general agents search for the best timber they can find, to represent them as 
locals, and select them for honesty and ability. Some locals are born great 
— some achieve greatness — and some have greatness thrust upon them. 

While I think that the local has great influence on the success of a com- 
pany, I know that an adjuster can make or break the business of the best 
company in existence, in his field. It has been my proud satisfaction thus 
far, to have had all losses fairly adjusted and promptly paid, and by doing 


so, they have secured for me and themselves, increased patronage and 
the confidence of the insuring public. I do not think a local should 
ever be ca led upon to adjust a lo.s, however small, for the reason that the 
assured expects favors at his hands, unwarranted by the contract. 

I sincerely hope that your great " compact " will pass unscathed through 
the firey ordeal to which it is now subje3ted, and will retain its present per- 
fection, unimpaired, even if you have to stand a notice that — Assessment 
No. 5,000 is now due, and unless paid b3fore the — day of your ben- 
eficiary certificate will stand suspended at an angle of 45°. 

The fear of returning to the old order of things fills my mind with fore- 
bodings; but I hope the concentrated talent of your Association will prevent 
such a catastrophe. 

Mr. President, I forgive you this time for the compliment you extended 
me, of writing a letter; but if you could see me at this hour — 1: 30 a. m. — 
with a pitcher of water on my right and spiritual comfort on my left, strug- 
gling with a modesty, unknown to the profession, that shrinks from the or- 
deal of entertaining for a moment an association of gentlemen so talented, 
and yet so critical, you would be inclined to smother the flame of spontane- 
ous combustion which threatens a conflagration which would shake the in- 
surance world from center to circumference. 

Wishing you all a pleasant reunion, 

I am, yery respectfully, 

M. R. HOOK. 

Mr. Farnfield — Those who know Mr. Hook can realize him in 
the position in which he describes himself. 

The President — We will now listen to a paper on " Losses 
and Adjustments," by Mr. Chalmers. 

Mr. W. L. Chalmers then read a paper on 


Mr. President and Gentlemen of the 

Fire Underwriters' Association of the Pacific: 

As Chairman of the Committee on Losses and Adjustments, I think it well 
to state, by way of preface to my paper, that in accordance with the rule 
made last year requiring each member of the committee to furnish a separate 
paper, this committee intends to present three — one by Mr. Thompson, on 
the advantages of the adjusting bureau system; another by Mr. Lowden, 
on the adjusting of book losses; and the following by myself, on losses and 
their causes, considered from a novel standpoint. 

We have had a great many papers read before this Association on the 
subject of losses, considered from a physical and a moral standpoint. I 


myself have presented two papers on that subject. It became, therefore, a 
mutter of some consideration with me how to give the Association some- 
thing out of the beaten track. The writer of books, the preacher, the 
lecturer, and the essayist gather together from reading, general observation, 
the remarks, opinions and thoughts of others, the material for their literary 
efforts; really very little original matter is to be found in the literary produc- 
tions of our times. So, during the past year, I have been jotting down 
from time to time, here a little, there a little, occurrences, ideas and opinions 
and thoughts of others, as material for this paper; and I have endeavored 
to arrange this material so as to present it to you in as good shape as pos- 

Now, without further preamble, let me ask: Do losses occur from any 
other than physical or moral causes? Are the assured always the real 
culprits — if I may be allowed to use such a term? Unhesitatingly I answer, 
no. The companies and their representatives are but too often the cause of 
losses that could be avoided. Among these avoidable causes of loss may 
be mentioned the immoderate greed for business, thereby inducing the ac- 
ceptance of risks of a shady character. We all know brokers and local agents 
who look more to the ampunt of premium and large commissions than to 
the character of the risk; who will force such risks upon the companies, 
offering as excuse some flimsy stor} 7 abont the applicant having a line of 
first-class business which he can secure, if only the shady risk is accepted; 
forgetting the fact, that if a loss occurs — as is bnt too often the case — the 
profit on the good business is swallowed up a thousand fold. 

Again, the condoniug by the companies of exorbitant claims is another 
cause of avoidable loss arising from greed for business. A case of this kind 
is fre.-h in the memory of us all. A small fire occurred, doing but a tri- 
fling damage to the building — some $30 to $40. There was a little smoke, 
which, in the estimation of the owners of the stock, caused a damage of 
over $20,000. This they claimed; $500 was offered by the adjusters, but 
indignantly refused, an appraisement was demanded, gone into, abandon- 
ed, and the matter was compromised for as many thousands of dollars as the 
loss actually was hundreds. During the progress of the adjustment the 
companies became alarmed and indignant; a meeting was held, when, with 
one exception, it was decided to cancel the policies as soon as the loss was 
adjusted. So eager were some to get off the risk, that they did not wait un- 
til then, but canceled at once. This case was so flagrant that it was sub- 
mitted to a meeting of the entire insurance fraternity, and by a rising vote, 
with two exceptions, it was then and there agreed that when the companies 
then covering on the risk canceled, none of the others should accept the 
canceled lines. What was the result? A strong pressure was brought to 
bear on the companies by influential brokers and insurers; and out of some 
28 companies interested in the loss, only five or six had backbone enough 
to stand up to their agreement. A noble band of Spartans! Nay, more; 
some of those who canceled before the adjustment was completed, not only 


issued new policies, but took increased lines, while some who agreed not to 
accept any of the canceled lines, did so — thus falling down before the Jug- 
gernaut of greed for business. If these claimants, or any of their friends, 
who have gone through a similar profitable experience have another small 
loss and make another big claim, can you blame them? I say, no! That 
blame must lie on the shoulders of those weak-kneed ones who aided and 
abetted them on former occasions. Do you think such doings are not known 
outside of this Pacific Coast? They are known and commented on by the 
insurance men in the East, as some now within the sound of my voice 
can testify, who tell us we are the laughing stock of these men, who justly 
complain of loose adjustment on our side. 

And this brings me to another avoidable cause of loss, viz.: the employ- 
ment of incompetent men as adjusters— as is sometimes don- — from mistaken 
motives of economy or otherwise. A loss occurs in a country town; it will 
cost money to send an adjuster, and so the local agent is asked to act. Some 
of these gentlemen know how to do it; a great many of them know nothing 
about it — but they do it all the same; and in nine cases out of ten the 
claimant gets a great deal more, over and above his actual loss, lhan the 
cost of employing a regular adjuster would have amounted to. But that is 
not the worst result of asking local agents to adjust losses. They naturally 
lean towards their customer, and, blinded by self-interest to their duty to- 
their companies, they make what is called a very liberal settlement. How 
often have adjusters had it thrown in their teeth that So-and-so (a local 
agent) allowed this and that on a former oc< asion, and the claimant cannot 
see why he should not now meet with the same open-handed treatment. Let 
me not be misunderstood on this point. I do not intend these remarks as 
applicable to all locals — for there are local agents, and local agents. Some 
of them are fully as competent to adjust losses as is the average regular ad- 
juster, and who are so loyal to their companies as not to improperly favor 
the claimant; while others, I regret to say, too often do all they canto im- 
pede the labors of the adjuster, and complicate matters as much as possible. 

Again, how often does it happen that young, inexperienced men are sent 
out as full-fledged adjusters. Some of you remember a case in point. A 
very extensive general fire occurred some years ago in a certain town. 
Eleven or twelve adjusters started together for the scene of the fire. 
Shortly after leaving, a gentleman, a stranger to us all, introduced himself 
as the special agent and adjuster of the Blank Insurance Company. He re- 
marked that his company had several losses at the place we were going to; 
that this was his first trip; that he had never adjusted a loss before, and 
asked our kind assistance to help him out. This, as a matter of course, we 
did; and his company had its losses adjusted on that occasion by others 
without charge, except their man's traveling expenses. 

This is not an isolated case; the same thing happens time and again, 
but very often there are no friendly adjusters on the spot to instruct the 
green hand, the consequence being, as some of us know, large sums paid 


over and above actual loss. But you may say young men must make a be- 
ginning. I fully agree with that — give the young men a show. I do not 
forget that I was once young myself — a long, long time ago. Pardon me if I 
here introduce a personal reminiscence of the first adjustment I ever partici- 
pated in. I will not say in what year it was, but I was then a young lad of 
nine years of age. My father had just organized a company, which now 
ranks among the leading British offices doing business on this Coast. Like 
Poo Bah, Esq., of Titipu, he himself held many offices, viz., that of gen- 
eral manager, special agent, adjuster, etc. It was school vacation time, and 
he took me with him on a trip through the country, appointing agents. The 
vehicle we traveled in was called a " gig," which is a buggy on two wheels 
without a top. One day we arrived at a small town, and it so happened 
there had b°en a fire there the night before, doing trifling damage to a lot of 
groceries. Finding the loss was in his company, he adjusted it there and 
then. That was the first loss in which I participated in the adjustment 
of; for while he was settling the claim, I looked after the horse and buggy. 

I repeat, give the young men a chance; but teach them the business in 
a fair and honorable way, without doing so at the expense of others. Do as 
is often done in the East. There a bright yourjg man is picked out in the 
office, and when a loss occurs the adjuster takes him along as his clerk, 
thus affording the opportunity of seeing how the adjustment is accomplished. 
After a time he is entrusted with some small loss, until finally he is fully 
qualified to act independently in the adjustment of important cases. We, 
unfortunately, sometimes have large general fires. Then is the time to teach 
your young men; take them along as clerks; have them do 3 r our clerical 
work; charge your companies say $5 a day for their services, for is it not 
cheaper to pay a clerk $5 a day than for the adjuster himself to do the cleri- 
cal work at $15 or $20 a day, when he might be attending to other adjustments? 
I have tried it, and found that not only did the company save money, but 
the clerk gained a considerable amount of experience with adjusting, so as in 
time to fit him to take the place of his former chief. 

Again, not only should local agents not be asked to adjust losses, but the 
fewer losses adjusted by general agents, the better; and I will remark that 
the custom of some companies requiring general agents to pay all adjusting 
expenses out of their own pockets, is a bad one. I could s-iy a great deal 
on this subject, but I forbear; simply compressing into one sentence all I 
have to say, and that is, a contract of this kind, while it may save at the 
spiggot, causes loss at the bung-hole. 

Another cause of avoidable loss is the employment of improper appraisers. 
In my paper on Losses and Adjustments, read before this Association three 
years ago, I took occasion to say something on this subject. I then pointed 
out the difficulty of securing an impartial man as appraiser in a small town. 
These men have generally an ax to grind, and will always, either from sym- 
pathy or self interest, lean towards the claimant. Adjusters are fully cog- 
nizant of the truth of what I now say. Avoid, therefore, going into an ap- 


praisement in small places; but if you must do so, get a good man from some 
other place. While the expense of doiug this will be, as a matter of course, 
much greater than if you employed a local man, you will have the satis- 
faction of knowing you have had a fair deal, and in most cases you will save 
money for the company. 

Another avoidable cause of loss is permitting other insurance without limit 
or specific amount. Turning to page 37 of the Kate Book, under paragraph 
H, we find as follows: 

"Permission for other insurance shall be given in following words: 'Permission for 
$ other insurance concurrent herewith.' " 

Now that is a most excellent rule, if carried out; but is it? No. The 
rule is much more honored in the breach than in the observance. Why, I 
cannot say. There are many regulations of minor import, insisted upon by 
the Pacific Insurance Union, while this one is virtually ignored. How often 
does the adjuster find the clause, " other insurance permitted," in a policy 
covering some small retail store or corner grocery, or perhaps a lot of 
wretched furniture in some miserable shanty; and has good reason to believe 
that the permission of unlimited insurance had been taken advantage of, to 
increase the amount of insurance and realize on the policy. This particular 
rale ought to be rigorously enforced, for it is simply absurd, not to say crim- 
inal, to permit a small corner groceryman or the owner of a few articles of 
nearly worthless furniture, to have the power to increase his insurance to 
any amount without reference to the compan ; es. I repeat, it is done every 
day, and we all know it; the lame excuse being, " the broker insisted on it." 
With every disposition to humor the brokers, we ought not to lose sight of 
the fact, that while they pocket the commissions, they most assuredly do not 
pay the losses. 

Another avoidable cause of loss is the improper or careless wording of poli- 
cies. How often do we permit green country agents to write policies, and 
have their Dailies passed upon by still greener hands at headquarters. It is 
true the Pacific Insurance Union is to a certain extent a check on this evil, 
but not altogether so. In the very able paper prepared by Mr. George East- 
on on forms of policies, read before this Association three years ago, he sug- 
gested a remedy for this very evil. I quote from his paper: 

In an Association like this, containing all our talented "field men," what a grand 
opportunity we have, with the aid of these gentlemen, backed by our labor at the gen- 
eral agency office, to correct many of the bad forms of policies, by preventing such 
at the start. It is easier to instruct our agents how to properly word the contract than 
to amend their daily reports afterwards— easier to prevent than to cure; and to accom- 
plish this, let this Association, through a Committee appointed by its President, pre- 
pare and submit various forms of policies, applicable to the hazards of the Coast; and 
after such have been discussed, amended, if necessary, and adopted, let them be printed 
in goodly number, and go forth stamped, not only with the approval of this Associa- 
tion, but with a pledge of adherence thereto by every member thereof. Thus we will 
aid and intelligently instruct our sub-agents, where perhaps, more than anywhere 
else, Is some such plan as this, necessary and easily entered upon. 



Now, that is a most excellent suggestion, but like so many of the good* 
things brought before us at our annual gatherings, no action has been taken 
to apply the remedy suggested. Adjusters will bear me out when I assert, 
that thousands of dollars are lost through this careless wording of policies. 

Another evil practice that has a tendency to cause loss, is the insane haste 
on the part of some companies to pay losses before the debris has cooled off. 
How often when a large fire occurs where many companies are interested, 
do we find some one or two trying to get ahead of the others, and as we 
have heard, on the presumption that the loss is total, hand over a check lor 
the face of the policy. A case of this kind can be cited, where, after the~ 
adjustment was completed by their more business like competitors, the loss 
was found not to be total, and it is said, the party received a check for 
his share of the salvage. 

Does such an improper method of trying to ingratiate themselves with 
their patrons do these men any good? No; on the contrary good business, 
men do not believe in that kind of work, while honest claimants are willing 
to wait until their loss is properly adjusted. Dishonest ones, on the other 
hand, growl and claim they have been badly treated if an immediate settle- 
ment is not made. Nay more, these hasty adjustments and payments are 
an inducement to rogues to become incendiaries and victimize the compan- 
ies. This brings to my mind a case in point, in which I was the hoodwinked 
adjuster, and was guilty of the very thing of which I am now speaking. 

Some years ago I was sent to a country town to adjust a loss on house- 
hold furniture. On arriving at the place I found that the claimant was a 
relative of the company's agent. He informed me that he had a schedule of 
the furniture prepared; that the insured was such a nice man, newly mar- 
ried; furniture nearly all new and good, and his loss double the amount of 
the policy, which was for $700. I met the nice man, and was most favorably 
impiessed with his looks. He was night watchman for the town and of; 
course was absent at the time of the fire — 1 a. m. Nothing was left but 
ashes; all his wife's clothes destroyed. By the way, she happened to be 
sleeping on that particular night in her father's house, the reason assigned 
being, that her husband had lately arrested some rough characters, who 
had threatened to get even, and she was afraid to remain alone at night. It 
is needless to say that I was most favorably impressed with the young wife 
also; and having had good accounts of them from everybody, the hard 
heart of the adjuster was softened. I took proofs, and gave the man a check 
for the amount of his policy. They both thanked me with tears in their 
eyes; I was such a nice gentleman — they never could forget me; would always 
remember me in their prayers, and would recommend my company to their 
friends and relatives. So far so good. Some three weeks afterwards, taking 
-Qp the morning paper, and, as my custom is, casting my eye over the column 
devoted to Pacific Coast news, in search of fires, I found the (to me) start- 
ling item, that my man, the night watchman, had been arrested on a charge 
of arson. That he had hired two Greasers to fire his house, promisiug to. 


give them $100 as soon as he obtained the insurance money. Failing tc* 
carry out that promise, they let the cat out of the bag. When in jail, a- 
detective overheard a conversation between the trio, which clearly proved 
the guilt of the night watchman. He was indicted, tried, and, as usual, 
acquitted. Some months afterwards, happening to meet one of the attorneys 
who defended him at the trial, I alluded to the case, and asked how much 
of the $700 he had got for his services. He laughed, and said, * 'About all;'' 
adding that he had well earned it, for had he been District Attorney, the fel- 
low must have gone to States Prison. Now, had I waited the sixty days al- 
lowed by the policy, instead of paying the loss at once, the company would 
most likely have been so much, the gainer. I have no doubt you can cite 
similar cases; many of you adjusters have been victimized in a similar man- 
ner, and we all will be, until the good rule is established of not paying loss- 
es until they mature, at the expiration of the sixty days named in the policies. 
But one other cause of avoidable loss, and I have done. I read with much, 
interest an article in this month's issue of the Coast Review, on proposed 
insurance legislation. I had intended to say something upon that subject 
in this paper, because I think the payment of blood money to the pack of 
vampires who assemble bi-annually at Sacramento to make laws — God save 
the mark! no; but to enrich themselves at the expense of corporations, and 
especially insurance corporations, or any one who has money, is an avoidable 
cause of loss. It ought not to be done. It has been done in the past, and y 
will have to be done every two years, unless the companies shut down, 
and ignore these blood-suckers. I cordially endorse what our friend, the 
editor, says in the article referred to on this subject. Here it is: 

We believe that a proper presentation of the facts as to the compact will persuade the 
Legislature to reject the bill, or Governor Bartlett to veto the law, If not, if it proves 
useless to appeal to common sense and the principles of fair play, a general withdrawal 
should be resorted to. The really influential elements of society, now possibly indif- 
ferent, will then demand and secure the immediate repeal of the anti-compact law, 
even if an extra session be necessary. 

Now that is good sound advice. Such action was taken in Idaho, and the 
obnoxious law was repealed at the first meeting of the Legislature after it had 
been passed. But you will say: "Oh* that is a small field from which the 
companies could withdraw without much harm to themselves." Do the 
same thing here, and the insuring public will not wait for the next meeting, 
of the Legislature; the Governor will be asked to, and will call an extra ses- 
sion, and the "cinch" laws will be repealed by the very men who enact 
them, because of their fear of offendiDg their constituents. Thus and thus 
only can this constant fight for blood money be put a stop to. 

I feel that I have trespassed too long on your time. I have said that among, 
the avoidable causes of loss is the immoderate greed for business; the want 
of pluck on the part of the companies; the employment of incompetent men 
as adjusters and appraisers; allowing unlimited insurance; the paymentof loss 


before the expiration of the sixty days; the careless wording of policies; 
and last but not least, the payment of blood money to kill cinch bills. 

As stated at the outset of this paper, the ideas set forth are not alone my 
own, but those I have heard some of you express in unmistakable terms. 
If I have said anything out of the way — talked perhaps too pointedly, and 
thus may have trodden on some one's toes, I regret it; but I have nothing to 
retract, for I conscientiously believe that what I have said is the truth, the 
whole truth, and nothing but the truth. 

Respectfully submitted, 


The President — Mr. Chalmers' paper as usual is very excel- 
lent and worthy of future consideration. There are some points 
in it that we ought to discuss in our meetings. I would like 
some member to remember and have it called up in our first 
monthly meeting. "We are compelled to a certain extent to dis- 
arrange our programme, and I think under the circumstances 
that it would not be amiss to get a little of the dessert before 
we get all the meat. We will therefore call upon Mr. Geo. F. 
Grant for some scraps from the Knapsack. 

Mr. Geo. F. Grant then read the following contributions 
from the " California Knapsack:" 

Vol. XI. THE KNAPSACK. No. 1. 

San Francisco, February 15th, 1887. 

Gentlemen of the Association, and friends of Underwriting, I greet you. 

In the budget called the Knapsack, for 1887, we find all of the pathetic, 
humorous, corrective and personal, which active minds have been willing to 
contribute during hours stolen from business. I use this phrase as a figure 
cf speech. 

Stealing is a serious matter; it not only involves a perpetual endeavor to 
conceal the act, but it lays upon the conscience in unexpected and incon- 
venient times and places. Why should one steal that which is his own? — a 
species o£ kleptomania which shifts an article from one pocket to another, 
the pocket being on the person of the thief. 

The hours of business cannot be stolen. There is a popular impression to 
the contrary, but it is incorrect. An aimless, heedless clock-watcher can 
" soldier" through days of time in an office. A no-account special can read 
novels in a shady corner of a summer hotel. An adjuster can demonstrate 
the accuracy of calculation on a billiard-cloth. This is not theft— it is fraud. 
.If you think by the rules of Knapsack philosophy I have demonstrated these 


acts to be theft, I will, in accordance with Knapsack ethics, yield the point 
for the sake of harmony. 

An earnest, interested worker will put in all his working hours for the* 
benefit of the office for which he toils. If he is not a strong, independent,, 
tactful person, he is out of place with insurance. Being a fit person, he- 
should be encouraged to imbue his work with his individuality. This indi- 
viduality is strengthened and improved by writing Knapsack articles. See?' 

When I say this business of ours is carried on at too high a pressure, I 
speak a truth well known to all of you. From a business conducted in such 
a way that an applicant submitted himself and his risk to close scrutiny at 
the office during office hours, we have reached a point where solicitors in 
every grade of station and education, or the lack of both, pursue all classes, 
of people for all classes of risks by day and night. 4 

*Your company and mine were the last to wheel into line and follow sor- 
rowfully at the tail of the procession; but we have been poked at and prod- 
ded into until at last we have determined to lead the stampede; the wholes 
mental effort of our wonderful and incomprehensible being is strained in an 
endeavor to " get there." It matters not how long or how short a time this 
is to continue. It is all wrong. 

As I look upon the faces of this calm and dignified body of men before 
me, I wonder why our business should not be one of elegant deliberation. 
The feverish day of stock gambling has gone by, we have no Wall street 
clamour in our midst; we are removed from the world's strife just as far as 
the western boundary of a continent will permit. We take no note of the 
orb of day except to watch his lazy decline into old ocean as he winks good 
night after a long day's methodical work; our climate is one of open doors 
and windows, our breezes fan odors of palm and spices across sleepy plains, 
yet here we plunge and rear and kick ourselves into a state of delirium in 
the vain hope of outdoing our neighbor, in the vain hope of attaining the 

Underwriters of the Pacific, the Knapsack says to you take more time > 
relax, give up stimulants, drop brain and nerve food, let gentle exercise and 
moderate action govern mind and body, that we may turn into legitimate 
channels the business of fire insurance. Then will you have time to pre- 
pare your brainy articles for this annual intellectual feast, without fear of 
the accusation of having stolen it from your business. " May the Lord love 
you and not call for you too soon." GEO. F. GRANT, 


"forty's hose. 

While a member of the Committee on Fire Department and Water Supply 
I addressed the principal agents of towns for information regarding "De- 
partments." From Santa Fe came a reply in the form of a photograph, 
representing a dozen native Mexican children standing all in a row uni- 
formed a la Lady Godiva, with the following particulars: 


Name of company, Gulliver No. 1; Make of machine, old style hand; Sup- 
ply unlimited; Head, all right in the main; Plugs, Mexican mustangs. 


Mnjor B and Captain C had each a damage to adjust on each one of two 
buildings owned by a German widow in an interior town, and when the 
-reports of the two " competent appraisers, duly appointed and sworn," were 
hauded iD, the major with his knowledge of human nature generally, and 
woman nature in particular, reported his loss to the assured at $200.00 less 
than the award, and when she objected, as he knew she would, he generously 
rsplit the difference and settled to her entire satisfaction at $ 100.00 less than 
the appraiser's estimate. 

The captain reported the exact award on his building, and the good lady 
having secured $100.00 advance from the major, went for the captain, who 
having exhausted his limit, had nothing but kind words to offer ; she would 
not be comforted and said, "now captain vy don't you do like de major, he 
vas a nice shentlemen, vhen ve don't vas agreed he comes up a little and I 
<jomes down a little and ve de connection makes. 

Suggested by hearing the author of "that bill" speak slightingly of the 
.gentlemen underwriters. 

One crab season, during prehistoric times, a young dog of a breed some- 
what backward in development of tail, sat by the shore of the resounding 
sea watching hungrily the dogs of another and more advanced breed catch- 
ing the luscious sea fruit. A strong desire to possess the long and broadly 
leathered tail with which to fish, siezed him and his gratification was great 
when he felt his own short stub lengthening, and became supreme when 
dipping it into the water he felt the first gentle pulls and drew to hand a fine 
breakfast . 

Thenceforward the foolish dog courted and flattered his tail until the tail 
becoming arrogant, dissatisfied with the portion of crab which had been 
••allowed it, insisted that, since it was the direct means of bringing the crab 
to the dog, it should have a full quarter of each catch. The head objected, 
paying, "No, already have you as our great feeder been strengthened by an 
•ever-increasing share of our sustenance, some part of which is certainly due 
to me. I, with the rest of the body, lived, though not so well as now, before 
you joined us. If you cannot be satisfied with your already large portion of 
our common crab, leave us." But the tail, beginning to realize how little 
profit would be to it in the fishing business had it not the head to guide it 
to its prey and the stomach to digest and return it in nutritious form, 
refused to leave but still insisted that it was entitled to all the surplus over 
enough to sustain the rest of the body. In the wrestling match which 


•«ns ied, it was made clear that though the tail was remarkably good as a 
feeder to the body, it was not so reliable in a fight as the head. Humbled 
and content to fill its own fuuctions, the tail became from that time a use- 
ful member of that breed of dogs. 

Moral.— This fable teaches the wisdom of maintaining, as representatives 
of insurance companies, a proper dignity, while cultivating agents, and that 
it is possible to bend so low as to expose a portion of the body, which, pre- 
sented in that way, is always finally kicked by agents and brokers. 

Perhaps there is nothing more distasteful to a boy or young man than a 
person who is known as a " character." In the days when the influence of 
home, the study room, the play ground and the chapel is on the growing 
youth, such people as have peculiarities, strong-minded notions, or eccentric 
fads, are regarded with disfavor bordering on hatred. 

In after life, with broadened business experience, that experience which 
seems to teach that the truthful lie, the honest steal,' and that virtue has no 
reward whatever of a taugible nature, men regard the cranks of other men 
with amusement, not to say interest, and often study them for literary use, 
as lay figures in novels and magazine sketches. 

In my friend Overton is a deep vein of fantastic sobriety ; I have taken 
no end of comfort in watching his intelligent inconsistencies. It was he who 
studied the effect of various kinds of medicine on himself, and because he' 
was feeling unnaturally disturbed from his last alopathic venture, tried 
something else homeopathically to set him right. 

He was a special agent, and one day came to the committee room with 
a, box of pills which he had found in a drawer of his bureau; no one knew 
what kind of pill, so he proposed as there was just enough of them to go 
around, we all take one and watch the effect. He was eating lemons by the 
dozen just then, but he stopped and tried eau sucre on reading the benefits 
of the drink in a French paper. One day he splashed a suspicion of ammonia 
in his eye, and went about telling how slowly but surely it was destroying 
his sight ; he negotiated for a dog to lead him by a string when darkness 
set in. 

When the history of the Garden of Eden was under discussion, it was he 
who said, " show me a sworn statement from the snake and I will adjust the 

In appearance he was not unlike a clergyman, and in the rapid one-day 
stands, a special agent makes in towns secured much business for his com- 
pany and retained the good will of every one who met him once, for like 
dead sea fruit, the second taste was away off. He bought a scalper's ticket 
and paid his fare over again with bland politeness to the conductor who said, 
*" you're a h — 1 of a cattle drover." 

Once I met him at a famous hot spring resort ; he was really feeling seedy 
and worn out. The other boys— there were four of us in all, advised him to 


lay off a week and take a course of baths under the direction of the resident 
physician; he consented. We went to the office where a printed notice gave 
terms for bathers, fifty cents in advance per bath, no discount. 

He objected, " suppose I don't like it, suppose I only take half a bath, my 
money is gone." The clerk put the other view, " suppose you die in the 
bath, we haven't got anything." " Oh, Lord ! do they die often?" he asked. 

He objected to the custom of depositing valuables at the office, but did so 
finally, preferring to be robbed by the boss rather than in the dressing room. 

We took him to the " tepidarium," clothed in a turban and a waistband, 
not unlike a Patagonian warrior in appearance, provided the Patagonian had 
not eaten missionaries for some months, in fact a skeletonized Patagonian. 
Here he buttonholed the attendont, (that is if it is proper to say you can 
buttonhole a person dressed like Adam before the fall. 

"Look here ! you are the man in charge here, you have been here a long 
time, may be for years ; well, you look like an intelligent man, a very iutelli- 
gent man; I will venture to say you know as much about the effect of these 
baths as any doctor ; of course you do, in fact more than the doctor, for you 
haven't got any fool reputation to sustain and no fees to charge ; that's it, 
fees ; bleed you to death these doctors, I know them. You just prescribe 
for me and I'll make it all right. You see at a glance what's the matter 
with me; liver all gone, nerves used up, no appetite, no strength, see? Now 
what kind of a bath ought I to take first? Mean to try everyone of them 
before I get through, but the main thing is to start right, see?" 

The attendant saw the solemn winks at the eyes of the party, and dropped 
to the level of the situation ; he prescribed hot air first. He told Overton 
to step into a dark box of a closet where the thermometer marked 180 
degrees, and wait there till he called him ; there was a place to sit dimly 
outlined and no handle to the door. When Overton stepped in the atten- 
dant laid his hand against the door and closed it; Overton had not been in 
three seconds before he called out : 

"Hi! hello! I want to say something! Say! hello! hi there, say J 
there's something wrong here. Say ! open the door ! let me out ! Help ! 
murder ! I can't stand it ! Oh, for the Lord's sake open the door I" 

Suddenly he jumped against it and sprawled at the feet of his friends, who 
were convulsed with laughter. After one glance around he grinned and said, 
" I thought the darned old door was locked." Upon his form hung beads of 
perspiration and a deep blush of pink marked the brief period of rest he had 
taken inside. 

"Mister," said he to the attendant, •* feel of the muscles of my arm, if 
they are done, I'm cooked all through." 

Because New York is retiring or Chicago modest, should California fail to 
sing the praises of her talented sons? No! I think not. San Francisco con- 
tains so many people of unusual ability it is difficult to choose from among 


them, but there is one man who is entitled to all the credit of an unusual 

He is of interest to the insurance fraternity first of all. I do not say that 
others may not have accomplished as much before now, but it is the first 
case which has been brought to my notice on the Pacific Coast. Here is one 
without musical education, who does not know one note from another, with 
no more practice than a busy life allows, who can play upon five hundred 
pianos at one time. He did it in the presence of a large audience at the An- 
tisell factory fire. 

It is matter for comment that so many of our Pacific Coast insurance peo- 
ple have been fighting soldiers. To one, who never faced fire, to whom war 
is a page of history, the offering of life for a principle seems little short of 
martyrdom. It is heroism of the loftiest type. 

When I see these veteran underwriters marching to the tune of old-time 
battle songs, or strewing with sweet spring blossoms the graves of fallen 
comrades, I feel that our business is honored by them, that such material is 
in accord with our best endeavors to strengthen and purify the profession of 
legitimate underwriting. 

I thought of this while in Seattle at the time of the labor riot. That 
same courage which prompted the clerk in 1861, impelled the citizen in 1886, 
to take up arms to defend the peace of his home and fireside; among them 
my old friend and former local agent. True, he had never faced fire on the 
gory field of battle, but he had smelled powder at a target shoot. One cold 
and stormy night he patrolled a beat laid out for him. At midnight he 
saluted the officer in charge of munitions and requested a few rounds of 
cartridges, on the plea of possible failure to kill his man at the first fire. 

'•More ammunition!" said the officer; " why, you have forty rounds on 
your person this minute in that box " 

"Great Caesar! are those cartridges? I thought it was my lunch;" and 
the courage which prompted him to face death oozed away at the thought 
of hunger. 

I inclose herewith a paper for either the Knapsack or the waste-paper bas- 
ket, whichever to you it appears most fitted: 


And it was in the second year of the reign of King Stillomon, when the 
armies of the Israelites — yea, even unto their bondsmen and servants— went 
forth into the grain fields of the Philistines, crying, "Insure, insure, for the 
time cometh when your fields will burn " 

And they smote the Philistines hip and thigh, and gathered them in, and 
many were the books of policies they wrote. 

And verily they insured the grain for larger amounts even than was the 
value thereof, and great was the gain, and the elders in Israel were rejoiced. 
and they feasted and drank of the wines of Gilead, which is called cham- 
pagne, and dressed in purple and fine linen. 


And it came to pass about the eleventh hour, -when the wind swept the face 
of the earth, the Philistines, that they might spoil the Israelites and gather 
in the shekels, arose and set a torch over against the grain, and the fields 
were consumed with amazing great smoke. 

And when it was known in Israel, even unto the elders thereof, great was 
the gnashing of teeth and great w r as the cry. 

And the elders said, "Betrench or we shall lose our contingent." 

And they reduced the wages of their servants and their bookkeepers — yea, 
even unto the office boy — until the children in Israel no longer cried after 
them, "Jude, Jude," for verily they went forth dressed in hand-me-down 
clothes, and they took their meals standing — yea, even at the free lunch 


And in the following year, about the fifth month, the elders went down 
unto the gates of the city and looked abroad over the land, and they saw 
that the harvest was good, but they shook their heads and said, "Verily, I 
"will have none of it," and returned unto their counting houses. 

And the tribes of Philistines maiveled and arose and went unto the elders 
and said, "Behold our coming up, even from the ends of the land, for the 
<5rops are heavy and we want to insure." 

But the elders replied, "Even so," and they refused to give unto them the 
policies, and the countrymen returned unto their homes sore oppressed 

But lo, when the time came the Philistines gathered in their crop, which 
"was exceeding abundant, and not a single fire had been seen in tbe land. 

And the elders sat in their high places and mused and mused, and wished 
that they were dead. 

I ran into a story which caused a merry laugh. Ever on the alert for 
-something to please the readers of the Knapsack, I dressed this story up in 
a painfully alluring manner, and at a distance from home tried the effect of 
it on a solemn companion. He said he saw it in print in the Monitor before 
the war, or before the Chicago fire, or before some other remote event. It 
matters little when he saw it; the wretched fact remains that Brother Hine 
lad piinted it. 

If there is anything touching upon the subject of the heavens above, the 
^earth beneath, or the waters under the earth, which the Monitor has not 
published, aye and "originally" published, I should like very much to 
.know it. 

It is particularly painful to always hear that senseless remark, "I told 
.you so." I wish the editor of the Monitor would take a vacation; go off 
and catch cold and be laid up with something painless but confining, while 
things were going on that others could see and hear and print which would 
be news to him. 

In regard to this story of which I speak, he not only had it in print, but 
lie put in all the fine lines of the picture, had names and dates and loca- 


iions, described the kind of chromo, gave the company away, broke up the 
business — in fact forestalled me in every particular. It seems only fair to 
give a faint outline of the story, for we were not all born a hundred years 
ago, audit is time the tale was sent the rounds once more. Here it is: 

Once on a time a local agent was appointed by letter. At the remote dis- 
tance where he lived such small matters as bonds or instructions were not 
thought of; an exceedingly liberal outfit of supplies reached him, and here 
the business of that agency rested for some weeks, when one day a letter was 
received, saying: " Insurance business is dead in this place; but I have sold 
the picture cards you sent at $2 apiece. Inclosed please find remittance less 
my commission. I don't know if I charged enough; I can sell a few more at 
the same price. Please be more particular in your instructions to agents. 

Yours, etc." 


Thirty years ago, on the 6th of January, 1857, all the agents engaged in 
the fire insurance business in San Francisco, met and formed the first fire 
insurance organization which was established in the Pacific Coast States, 
which they named "The Board of Fire Insurance." These agencies were 
only nine in number, and represented only twelve fire insurance companies, 
viz.: Continental, represented by C. Adolphe Low; Phenix, represented by 
E. W. Crowell; Home, Niagara, Washington and Park, represented by 
Jonathan Hunt; Liverpool and London, represented by Joshua P. Haven; 
Royal, represented by McKinlay, Garriock & Co.; Imperial, represented by 
Falkner, Bell & Co.; Monarch, represented by Wm. Lane Booker; North- 
ern, represented, by Smith Bros. & Co.; Unity, reprerented by Dickson, 
DeWolf & Co. Joshua P. Haven was the President of the association, and 
E. R. Falkner was its Secretary. Not one of these agents is now doing a 
fire insurance busiuess here. 

Some of the persons engaged in our profession in those days seem to have 
had methods for obtaining busiuess similar to those said to be practiced by 
members of our fraternity at the present time; for, on the 24th of June of 
the same year in which they were organized, we find that they passed the 
following resolution, viz.: 

Resolved— That the payment by a company or its agent of the stamp re- 
quired upon a policy, without exacting the tax from the assured, will be 
regarded by this Board as a violation of its rules, being in fact a reduction 
of the rate of premium agreed upon between the members of the Board, 
and that a copy of this Resolution be served upon each member. 

The wholesome rule of the Pacific Insurance Union, requiring a delin- 
quent to pay a fine for an alleged deviation, and afterwards prove his inno- 
<J3nce in order to recover the amount of the fine, was not one of the rules 
in force at that time. 


The resolution calls to mind an old law of the State of California, im- 
posing a stamp tax upon the policy of one dollar for each thousand dollars 

In the following year a local company made its appearance in our midst. 
The California claims to be the oldest local company; but it will have to 
yield this claim, for it is a fact, of which probably none of the underwriters 
of the present day are aware, that the first fire insurance company incorpo- 
rated under the laws of the State of California was the German Mutual Fire 
Insurance Company of San Francisco, which was organized July 12th, 
1858. As this was the first local company, I will give a few facts of its 
history. Its President was J. W. G. Schulte; Vice-President, Frederick 
Meyer; Secretary, John Kohlmoss; its Treasurer was our well known towns- 
man, Nicholas Van Bergen; its office was at No. 136 Washington street. 

This company was evidently an aristocratic corporation, as it took pains 
to inform the public by an advertisement in one of our early directories, that 
its office hours were from 2 o'clock to 3 o'clock p. m. only. How refreshing 
it would be to have such a regulation in vogue now-a-days. Just imagine 
this community now coming unsolicitated to your office to obtain the protec- 
tion against fire, of which it is always in need, and which could only be ob- 
tained in one short hour out of the twenty-four! There would be no time 
for discussions about rates. What delightful serenity of mind those Teutonic 
underwriters must have enjoyed! 

This company was not only aristocratic, but it was also exclusive. By 
the terms of its articles of corporation, its business was confined entirely to 
the German population of this State. Whether it was that the moral hazard 
of our German residents of those days was so bad that they found it difficult 
to obtain insurance, or whether they had so little confidence in the integ- 
rity of other nationalities as not to be willing to insure them, the records do 
not enlighten us. 

We are frequently informed by the insurance press and by underwriters, 
of the great wisdom and skill of the Hartford underwriters; but let it be 
known that our German company distanced any Hartford company that 
ever existed in this, that they prosecuted a successful business and paid all 
their losses during a term of ten years without any capital whatever. They 
ceased issuing policies on the 24th of June, 1868, in consequence of I eiug 
called upon by the first Insurance Commissioner of this State to have a paid 
up capital of one hundred thousand dollars, in compliance with the laws 
then recently enacted. 

The incorporation of the California Mutual Marine Insurance Company 
(re-incorporated as the California Insurance Compmy in 1864) and the San 
Francisco Fire Insurance Company followed in 1861. The San Francisco 
left the insurance field quite too soon, after a remarkably conservative and 
profitable career. Its first Secretary and subsequent President. Mr. George 
C. Boardman, is still an active and honored member of our fraternity. 

Local companies now increased rapidly. The Merchants' Mutual, Fire- 


man's Fund and Pacific were incorporated in 1863; the California Home and 
Home Mutual in 18(54; the Occidental, Union and National in 1865; the 
Builders' in 1866; the People's in 1867; the Mechanics' in 1868; the Oriental 
in 1869; the State Investment in 1871; the Commercial in 1872; the Califor- 
nia Farmers' and Alameda County in 1874; the Western in 1878; the Oak- 
land Home in 1880; the Sun in 1881; Southern California and Anglo-Nevada 
in 1885. 

Only one of the local companies has been a disgrace to the profession, and 
that one owed its paternity to that illustrious historian of Ireland, banker, 
underwriter and professed philanthropist, Thomas Mooney, Esquire. To 
the credit of the fraternity be it kuown that he never was recognized as an 
underwriter in good standing by his brethren in the business. The days of 
the years of his insurance career were few and evil; he brought discredit 
upon our profession but more upon himself. 

It will thus be seen that twenty-three fire and fire and marine insurance 
companies have been incorporated in the State of California — yes, twenty- 
four, if we include the Merchants' Mutual, which took marine risks only. 
Of these twenty-four companies nine retired from business; three surren- 
dered to the fire fiend at Chicago; one only was forced by the Insurance 
Commissioner to go into liquidation, and one never got out of its swaddling 
clothes; leaving ten now in existence. 

Of the officers of the local companies who have gone "over the river," the 
older agents will remember Parker and Bond of the Fireman's Fund, Pierce 
of the National, Horner of the People's, Curtis of the State Investment, 
Stiles and Rothschild of the Occidental, Crowell of the California, Fay of the 
Union, and Scotchler and Bourne of the Merchants' Mutual. 

Without intending to make any insidious distinctions in mentioning per- 
sons, it is certainly to the credit of local companies that they have given to 
our profession such honored names as those of Hopkins, Touchard, Board- 
man, Story, Scotchler, Parker, Fay, Staples, Laton and others. 

As a class the local companies have certainly shown an honorable record, 
which it is to be hoped will always be maintained. Most of them have been 
severely tried in the fire and not found wanting. 

Note. — In the list of honored names none is brighter than that of Chas. D. Haven, to 
whom this Association is indebted for this bit of history.— Editor Knapsack. 


As in other professions, so in ours may be found " all sorts and condi- 
tions of men." Strong types of manhood side by side with infirmity; the 
well-dressed hobnobbing with the unkempt. A glance at some of the popu- 
lar lunch rooms oftentimes discovers the fastidious bon-vivant seated at 
table with one who knows little and cares less for the beauties of the cuisine. 
With the latter individual quality is of little import, quantity being his 


strong point; and as he is generally blessed with the digestion of an ostrich, 
his meals are frequent, his days peaceful, and his nights content. 

During one of my visits to a valley town of some little importance, and 
one which, by the way, could boast of a very fair hostelry, it was my for- 
tune, or misfortune, to witness the onslaught made upon the numerous 
viands by one of these last named brethren. 

It was in December, and rain had been the order of the day and night for 
nearly a month; the roads were execrable, hence it was almost impossible 
for " mine host " to secure for the comfort of his guests much, if any, of the 
products of the neighboring farms, and more especially eggs. 

On the morning following my arrival, I entered the dining room, and 
seating myself at a small side table, gave my order for eggs, toast and coffee. 
The waiter suggested that the eggs could hardly be relied upon, and I replied 
if they were not fresh I did not want them. Just at that moment a familiar 
voice struck upon my ear, " salmon, beefsteak, potatoes, toast, eggs and 
coffee, and yes, I guess I'll try some of that liver and onion hash." Looking 
up I recognized the back of our friend/ the " colonel,'' upon whom the land- 
lord was waiting in person, and the same suggestion concerning the eggs 
was made as had just been made to me. This, however, did not seem to 
impress the colonel with great importance, for he immediately added, "that's 
all right, bring me three, soft boiled. " The landlord looked unhappy but 
seeing that argument would be useless, the order was filled, and apparently 
to the colonel's satisfaction. Very shortly, however, our olfactories were 
assailed by a sulphurous odor, which became more and more disagreeable 
and oppressive. The landlord approached the colonel and hesitatingly re- 
marked, ''colonel, are those eggs all right ?" 

"Well," replied the veteran, "I have seen better, but they will do at this 
season of the year." Sorrowfully I mused to what base uses may we come 
at last. 

The old sailor's defini'ion of an epicure sounds very pat. "A son of a 
gun who will eat anything." 


Who but a prophet or the son of a prophet can tell whether the anti- 
compact law would or would not lead to open competition, except he judge 
by the past? 

Has fear of loss of salary, profit or company on the part of the individual, 
ever prevented rates being reduced by competition below paying basis ? Has 
not the existence of Boards of Underwriters always been necessery to 
preservation of paying rates? If not, why was every maDager and agent in 
San Francisco anxious to form the Pacific Insurance Union, when it became 
apparent that the Board or Underwriters could no longer stand the compe- 
tition of the unbound individuals outside its jurisdiction? 

Was it claimed before the committees in Sacramento (where it is our 


privilege to name figures honestly and dishonestly) that the business of 
insurance had not shown a handsome profit during the past "sixteen years?" 
Was not the Board of Underwriters organized in 1861, just twenty-six years 

Is it not known by all the members of the Association, that while Chief 
Surveyor Nichols is still a young man (may he grow old with the Union), 
that regular schedules prepared by the executive committees are the stand- 
ard by which rates are made? And if it is not known generally, does it not 
argue ill for the sincerity with which we field men have been working for 
more than two years? By the way, the General Manager tells me that he 
and the other young men who are employed fixing rates according to a sched- 
ule, have ordered snow-white wigs and a newly patented and quite expen- 
sive gray stubble from China, the oldest civilized country in the world. 

As to whether the Union has increased or decreased rates in the aggre- 
gate, can the fact be proven by computing the average rate? Is the average 
rate of any use whatever without a comparative statement of the number 
and amount of insurance on different classes of risks? Will not the increase 
from two per cent, to five per cent, on the Clunie Opera House offset fifteen 
or twenty reductions on dry-goods stores, if the question is to be decided 
by comparison of the average rates of the whole Coast business for 1883 and 

Is there any doubt that it is for the interest of companies to help on the- 
improvement in architecture which renders the chance of conflagration, 

While it may not be admitted that the compact provisions have not been 
lived up to by all the companies, in their letter, as far as they apply to brok- 
erage, yet Capt. Burns, an intelligent broker, and an old man, testified before 
the Senate Committee that he received 25 per cent, commission before the 
formation of the Union! Why is it that the desire to lessen his salary or 
general agency commission does not prevent the managers paying out 20 or 
30 per cent, for business? Would not, in an open competition, the same 
spirit of conservatism in the matter of rates seize him in the matter of 

Should we give up the Compact because we have failed to protect the 
broker? Since the broker has rebated, has requested the introduction 
of the Clunie. bill, should we not rather throw Jonah over than let the ship 
sink ? 

Is it true that any company would withdraw if the general manager en- 
forced the rates? If the compact was on the ragged edge, why was every 
member so anxious a week ago? Is not its necessity the only excuse for the 
existence of any combination? Would our combination not be more effect- 
ive if we, special agents, aided it with our advice as to rates, sometimes 
when our objects are broader than the mere getting a reduction in the rata 
of some risk (which we place in some other office; ? 

Aunt Sara (?). 


The editor of the Knapsack has learned to know that his opinion as to the 
value of contributions is no good. He is pained to observe that what he 
thought the weakest kind of gruel is received with most applause by his 
listening associates. Part of the penalty of his office is the custom of read- 
ing aloud the contents of the Knapsack. Aside from the pleasure it gives 
him to hear the sound of his own voice, there is " nothing in" this oral 
exercise. With, let us hope, a becoming modesty he has heretofore sup- 
posed the best contributions to come from his own pen, now the shocking 
truth is forced upon him that this is not so; he is, therefore, ready to receive 
anything the gentlemen see fit to send in, with the mild request that pro- 
fanity and double meanings be excluded. It transpires that polite literature 
of to-day is better without it. 

As for personalities in the Knapsack, those who think they detect a covert 
reference to an infringement of any of the rules laid down in the ten com- 
mandments to which they can apply the first person singular, are invited to 
come around and have it out with the editor. It is a settled rule never to 
"give away'' the name of a contributor. Members are therefore at liberty 
to claim the authorship of any item which strikes their sense of approbation 
without fear of detection. Think if you please of the "bread winners" and 
"beautiful snow." 

Every bit of the foregoing was incited by the item called "A Special's Di- 
lemma," which I will now read to you. I am so blind, so deaf, so dull, so 
Jacking in all the appreciative qualities which make up a good listener and 
so poor a raconteur that I fail to grasp the "dilemma" in its broad lines, 
besides I once knew an old and I dare say quite as unblushing a person — a 
special agent — to drink himself dizzy on dry wine aud leave town, having 
ordered the landlord to charge it in my account. This was at a gathering 
of the boys over a general conflagration. I was too obtuse to see the wit of 
this funny business then, and I am still groping in the dark as it were for 
the point of the joke; besides, although I deposited the necessary equivalent 
to save the credit of the craft, up to the present time no wealthy under- 
writer has thought to reimburse me. This brings me to 

"a special's dilemma/' 

An old and experienced special on this coast arrived in a country town 
and found the local agent away from home and not likely to return for some 
days. The said special had only fifty cents in his pocket, and not being ac- 
quainted with any one in this particular town, he with unblushing effront- 
ery walked into a rival local's office and entered into conversation with him, 
relating various experiences, and having ingratiated himself into said local's 
confidence, named the companies he was connected with. After awhile he 
explained his position, and his listener being quite delighted with his 
quaint humor, took out a handful of gold and said, "Here you are; take all 
you want." Our friend modestly asked for the loan of one dollar, to carry 
him to the next town, but being pressed, was finally prevailed upon to accept 


five dollars as the lowest limit the local would loan. He left with many 
promises of returning it at the first opportunity, but we have not yet heard 
if he has done so. 

Some years after he visited the same town and related the above circum- 
stance to his own representative, who immediately exclaimed, "What a 
blank fool that fellow was!" The question is, did he mean the special for 
not taking more, or the local for trusting the special. We can state that 
shortly after the above event the man who loaned the money went to the 
springs for his health, leaving a number of insurance companies to mourn 
his departure. 

We call the head of our office the " old man." He is not so very old, but 
he is absent-minded to a degree; not so bad as the person who put his um- 
brella carefully in bed and stood himself behind the door all night, but 
absent-minded enough to make the boys grind their teeth when he forgets 
points they carefully tell to him. Now and then we have some fun out of 
it, as this incident will show. Christmas fell due on Saturday, perhaps you 
will remember. On Thursday evening the old man beamed all around with 
his top coat buttoned and umbrella iu hand, which he waived airily so as to 
include the whole force, and with a voice modulated by a recollection of 
Scroog and Marley, said, "Young gentlemen, I bid you good evening. It is 
perhaps needless for me to remark that I do not expect to see you at the 
office to-morrow." Then he went away to find that to-morrow was not 
Christmas. He had the office all to himself on Friday. 

11 Well," said he, as he placed one foot carefully on the other, both being 
raised to a convenient elevation, " an honest man has always been my admi- 
ration and delight. You know most of my life has been passed here on the 
coast. I have been engaged in various kinds of insurance, but fire insur- 
ance is my first love, although adjusting is more my natural forte. 

"I am a born adjuster, although I am willing to admit the study of law 
has made me more proficient than I otherwise would have been. I have 
seen many queer characters, some of them honest — but not many. I do 
love an honest man! I had a case once where a claimant was so honest he 
quite won my heart, and I have entertained a warm friendship for him ever 

"You know I am a positive man, a very positive man; there are few men 
more positive. This has made enemies for me, particularly in adjustments. 
People treat me with indifference at times, principally from professional 
jealousy. Being a lawyer, I have that much advantage, which seems to 
cause a petty feeling in the breasts of my rivals. But this claimant I speak 
of was a rare one. He had a fire, and claimed loss on some goods left by 
customers for repair, on the ground that he was responsible, and would 
have to make the loss good. It was a small affair, and I compromised the 


case. Well, sir, some time after that, in fact, after I had retired from the fire 
insurance business — for you will remember, my company withdrew from the 
Coast and reinsured — some time after that this man came in, and said he: 
'I have settled with all my customers, and I find I have $30 over; here it 
is; I wish. to return it to you.' I was so taken aback you could have knocked 
me down with a feather. What did I do? Why, took it, of course. Well, 
yes; I kept it— you see, the company had retired from the Coast. He was 
the most honest man I ever met; and in these days an honest man is a nov- 
elty — you hear me ?' ' 


Of the many elements that go to make up our lives, habit, or as it is 
oftentimes called, " second nature," wields an influence at once subtle and 
insinuating in the formation of our character and upon the developments of 
our minds. 

In our early years human nature is the strong controlling element, but as 
we gradually emerge from childhood habit asserts its sway, and ere we can 
hardly so realize, is changing our first nature and shaping our entire future. 

Self-esteem is of itself one of the most insidious and flattering of this 
formidable growth, and there are few of us indeed but have felt its influ- 
ence. Which one of us but has at some period in his early life ' ■ known it 
all?" — and we can, therefore, the more readily realize how easy it is for the 
young man just on the threshold of life's experience to look with surprise, 
if with no stronger feeling, on the men about him who have made little 
success, and perhaps a failure, in the great struggle of life. 

Surely, they would make no mistake like that; yet, my young friend, for 
one moment stop and consider. Is it not barely possible that this same self- 
esteem is carrying you unconsciously on the same dazzling current to the 
same shoals and rocks that have wrecked many a wiser, better and more 
talented man than yourself ? We have all been young once, and in those 
days our thoughts ran in about the same channel; therefore I say again, 
stop one moment and consider, my young friend, that the world is older 
than you are by several years; that for thousands of years it has been full of 
smarter and better men than yourself; that when they died the old globe 
went whirling on, and not one man in millions went to the funeral, or even 
heard of the death. 

Be as smart as you can, of course; shed the light of your wisdom abroad 
in the world, but don't try to dazzle or astonish the people with it. And 
don't imagine a thing is so very simple because you may happen to think it is. 
Don't be too sorry for your father or your employer because they know so 
much less than you do. In all probability they used to consider themselves 
as much smarter than their fathers as you think you are smarter than they 

The world has great need of young men, but no greater need than the 
young men have of the world. Your clothes fit you better than your father's 
fit him; they are more stylish, and they generally cost more money. It 


xised to be so with him once, and perhaps he thought his father old-fash- 
ioned. He is not so straight or so nimble us you are; but, young man, the 
■old gentleman has the biggest income, and his old-fashioned, homely, 
scrambling signature on the business end of a check will obtain more money 
from the bank in a few minutes than you could get out with a whole check- 
book filled out with your copper-plate signature. 

Young men are useful and they are ornamental, and we couldn't get along 
very well without them, but they are no novelties— they have been here 
before. Every generation has a full supply of them, and will have to the 
-end of time, and each crop will believe themselves quite ahead of the last, 
and will, in their turn, grow up and live to be thought old fogies by their 

Go ahead; have your day; your sons will, by-and-by, and pity you for 
your old, old ways. Go ahead; don't be afraid that your merit will not be 
discovered. People all over the world are hunting for you, and if you are 
worth finding, they will find you. A diamond is not so easily found as a 
quartz pebble, but people search for it all the more diligently. 

'Tis but a step from the sublime to the ridiculous. In the warm heart- 
beat of sympathy how often is found an underlying motive which, if defined, 
would astonish its possessor by the deliberation of its intent. 

Even while we speak the tender words of compassion, so grateful to the ear 
of him overcome and broken by sorrow, we may be disturbed in our own 
mind by the prospect of a delayed dinner. 

Thus, and much more of the same moral complexion did I reflect not long 
since. I had listened with pleased interest and serious face to the reading 
of a beautiful letter written by a good friend, a special agent, to a lady, the 
widowed successor in business of her late husband, and at the very close, 
while she hastily brushed the trembling tears from her cheeks, I laughed out 
loud and long. 

The letter was mainly of condolence, and closed something like this: 
"And now, my dear madam, one word in regard to your health. I regret 
to notice what I believe to be a failing of physical powers. Do not lose 
sight of the fact that your three beautiful children have in their mother a 
sole parent; that sturdy little Major,, who may some day be the Chief Execu- 
tive of our broad land, just now needs a mother's constant care and atten- 
tion. Preserve your health at all hazard. I fear that you are allowing 
business to steal away the hours which should be devoted to sleep. Please 
remember that quiet nature's sweet restorer, balmy sleep, is of the first im- 
portance—a vital necessity. Do not allow, I beg, anything to interfere with 
' this season of rest. I ask this for your own sake and for the sake of the 

The reverse side of this picture shows up as follows: The day before this 
letter was written, the writer of it, at five o'clock in the morning, stood 
before the door-bell at the widow's mansion, listening to its unwonted noise 
as it jangled through the silent house. Her father, hastily dressed, an- 
swered the summons, and remonstrated : 


" She worked late on her books last night, as usual, and I do not like to 

disturb her;" saying which, he closed the door. 
""Who is it, father?" came the voice of the widow. 
"A crazy man, who says his name is Blank, from San Francisco." 
11 Why yes; of course; the special for the Golden Calf. Ask him in." 
So said, so done. His train left at six o'clock; forty-five minutes talk 

settled the business of the special. He was thus able to fly to the next 

town, and at leisure write good sensible advice on the importance of sleep as 

an invigorator. 
It was unkind to check the widow's tears; but I saw only the gall of the 

insurance drummer. His heart is his own, but his time belongs to the 

ofhce who pays the salary. 

A shingle mill was recently destroyed by fire near Detroit, and the night- 
watchman was burned to a crisp. The dangers that beset a night-watchman 
when on duty are not properly recognized by a giddy and heedless world. 


A warranty Watchman Clause, as follows, is usual: 

" During such time as the property (specifying it) is idle, a watchman 
shall be employed, to be in and upon the premises day and night." 

What does this mean? The Courts have been asked, and have not always 
answered to the like effect. It will be admitted that a sufficient watch in 
one case might be wholly insufficient in another. Thus it will readily be 
perceived that it would not do to set a young lady of fifteen to watch a candy 
shop, or an insurance agent in this city (whom we all know) his neighbor's 
w r ife. Webster defines a watchman to be " One set to watch; a person who 
keeps guard; a sentinel." 

Is the simple employment of a watchman sufficient? Must the watchman 
be on duty day and night, or does the use of the singular imply that one 
watchman who watches during the day and sleeps at night, is such as is 
contemplated ? 

In recently contested cases respectable lawyers have contended that the 
employment is, in itself, sufficient, and if the watchman neglects his duties 
the company is nevertheless liable, and that in an} event there would be no 
forfeiture of the policy because the watchman slept during the night. 

Judge Armstrong, of the Superior Court of Sacramento County, has re- 
cently sustained these positions. Possibly he saw no other way to a verdict 
for the insured. The ruling seems to be directly in conflict with cases 
decided by the Supreme Court of this State; it certainly is in conflict with 
common sense. 

In the cases above referred to, to wit: Trojan Mining Company vs. Fire- 
mans Insurance Company, and Weazel vs. Commercial Insurance Company, 
it was held that a watchman was a man who watched. Possibly the Judges 


^who decided those cases had not sufficiently familiarized themselves with the 
modern insurance law to know that insurance contracts do not mean what 
they say, but what in the opiniou of some one else, they ought to say. 

The fact, however, that a Judge found it within the possibility of con- 
struction to give to the watchman's clause the meaning above indicated, 
clearly points the necessity of great care in formulating language intended 
to operate as a restriction upon the right of the assured to burn his property 
-and then collect. 


"Sufficient unto the day is the evil thereof," says the philosopher. "Act 
well your little part; there all the honor lies," sings the poet. At times a 
strange desire to pierce the veil of the future comes to me. I would look 
beyond the working plans of to-day and know something of the possibilities 
at least of underwriting. Keeping up with the procession, as it is called, 
seems to be best accomplished by adopting every loose, tenantless vagary of 
every theorist, no matter how illogical. At the annual meeting of all asso- 
ciations the goal seems to be personal aggrandizement. The papers pro- 
duced are for the most part a vehicle used to create or sustain a reputation; 
the writer arrays his facts and figures in a manner calculated to call atten- 
tion, not to the wants or needed reforms in the business, but to himself. 
Theories are thrown out as carelessly as pitching broadcast a handful of 
beans, with no more interest in the root they take. He who writes in favor 
of a scheme to-day may oppose it to-morrow, and receive applause for each 
effort . 

When I apply to my nearest friends for an opinion on the future of our 
ousiness, they good-naturedly laugh me out of countenance. Those who 
are recognized as our great minds receive my question with a cold stare and 
intimate that now is the very fruit time and harvest of insurance progress, 
while others who are working on new and apparently reckless lines are quite 
liappy in the advantage gained, and "think" less seldom than when they 
were not in the lead. 

Compared with the safe rules governing life insurance fire insurance is 
floundering in a sea of doubt. The cheerful and well fed air with which our 
leading managers guide their companies to disaster through paths of unques- 
tioned ruin is perplexing. Fortunately the Pacific Coast is still too far from 
the American centre to be entirely stripped bare of its adequate rates, its 
protecting safeguards. The march of time is doing us a mischief all the 
same; with it comes changed opinions. Some of our best field men are 
adopting plans of action which would have been odious in their own eyes a 
iew years back, and, worst of all, these plans are not boldly proclaimed as of 
old, but are known only by the fruit they bear. 

Is not reputation dear now as then, or is ours in truth a business to de- 
moralize, to harden the finer sensibilities and make dull the moral percep- 


tion? In other words, is now the future of ten years ago, and, if so, is it 
all correct? If agreed, let us say " Check," and pass on to the next item. 

Thoughts like these have made me somewhat persistent in my endeavor 
to gain information, so that I am in a manner avoided by my former asso- 
ciates. This disturbs me. One night after dinner I sat thinking of it when 
a card was handed in, followed by the person whose name it bore. 

"Pardon the apparent intrusion," said he; "my excuse shall be a slight 
service which it is in my power to render you. If you really wish to know 
something of the underwriter of the future, I can show him without incon- 
venience to 3 r ourself, nor will it take up much of your time. There is but 
one condition, simply that you will abandon yourself to the thought that a 
century has passed away since you last took an active part in fire insurance 

I assented and we passed out into the night. To my surprise I expe- 
rienced no new sensation. The streets were familiar and we paused at the 
building where my own office is located. Here a determined looking but 
silent man in uniform kept guard. 

"Conduct this person to the centre," said my companion. I followed 
along the familiar hall, saw him open my own office door, heard myself an- 
nounced and stepped into what at first seemed a spacious auditorium, but 
which by degrees I observed to be an office of about sixteen feet square, par- 
titioned off with huge plates of glass from other rooms or offices, so that on 
the right and left in front of the room in which I stood could be plainly 
seen all objects and tenants of other rooms or compartments on the same 

There was not time to fully realize this peculiar and unusual arrangement 
before I was greeted by the only occupant of the "centre," as it was called. 
In saying the only occupant, I do not take into account a silent man in uni- 
form, for I soon learned to know that such people were stationed everywhere 
about the place like articles of indispensable furniture. The voice which 
greeted me was low and sweet, so gentle and winning indeed that I immedi- 
ately contrasted it with the rude, not to say surly salutations of my own 

" May I ask whom I have the honor of addressing? " said I. This seem- 
ed a trifle absurd, considering the formality of my introduction. 

" It is with pleasure," said he, " also with pride that I announce myself 
Lieutenant Director of the Centre of the Pacific Coast Department.'' (Here 
he mentioned the name of my own company.) 

While he was speaking I noticed the peculiarity of his dress, which at first 
I mistook for a bathing suit. It was of dark silk, knitted, fitting the form 
closely — a costume, it was explained, in vogue for the use of bank officials, 
county officers and those in positions of trust or who handled the funds of 
others. There were no pockets in the clothes. It was a most becoming 
dress, and my entertainer seemed so much at ease that I am sure if he had 
worn the clumsy apparel of my own time it would have made him appear 



"I knew of your coming," said he, "from the general director, he who 
visited your home and invited you here. The general director is the only 
one of us who goes outside the building, you know; the rest of us take our 
meals, our exercise and our sleep inside . We often have a hop on the roof 
when a few ladies are included, but while we are employed by the company 
we do not talk to strange men. These silent things in uniforms are called 
* Pinkertons.' They are to us such information as the calendar used to be 
to insurance offices — albeit they are fewer and less expensive." 

"Is that because their days are numbered?" I asked. He only frowned, 
and continued: 

"I am allowed to talk to such people as are introduced by the general 
director; but I take little pleasure in such talks, since my conversational 
limit is cut out for me in advance, as this Piokerton in the corner well 
knows. To really enjoy a conversation, one must be at liberty to tell secrets, 
lie about his friends, and abuse the other company, as you are no doubt 

" We are all employed here for a term of seven years. During that time 
we surrender ourselves to the company by contract, after which we can 
re-enlist or be pensioned off, each according to his length of servitude." 

"Much more just than working all your vigorous life for a company, and 
then be turned out in the streets in old age to make room for a better be- 
cause a younger man," I could not help saying. 

"Yes, no doubt," replied the lieutenant; "still it cannot be denied that 
the strain on one in my position leaves him little to hope for mentally when 
his seven years are up. I have five years more to serve, and I feel the strain 
already. I commenced as a boy under Class I. in this very office, and 
worked my way around the house to the centre." 

At this moment our attention was attracted by two dark shadows which 
fell upon the white top of the table before which the lieutenant sat. 

"Two risks being taken," he explained, "if you look into the right hand 
apartment you will see two people making application. That object into 
which they are talking is a "voice wave." It catches and records the 
words, also reproduces them in print, making five impressions. These are 
held as evidence. This voice wave can be made to repeat aloud the words 
spoken into it, and is conclusive in a court of law. Of course a man may 
say he didn't know what he was talking about; lawyers and judges know 
only too well what a valid excuse that is. 

"The shadows of my desk are from the 'reflex' hanging yonder on the 
farther partition. This same machine also gathers light. Thus as daylight 
fades away the office is kept at an even state of luminosity. We take every 
risk that is offered. Nothing is excluded. The rates are found in the di- 
rectory of rates, such as that hanging beside the Pinkerton yonder. A di- 
rectory is issued annually, the old one being legal until the new is distrib- 
uted. The time has gone by for any one to say he knows the correct rate 
for any particular hazard from experience or time tables or classification. 


That instrument which looks like a piano, situated in the next case on the 
right, is the most accurate rate maker yet found. You throw in all the stat- 
istics and strike the corresponding chords and keys, and you have a rate 
which is positively correct. We use it in cases where the directory fails to 
contain a hazard. This one is called a petty organ. The grand organ at 
Chicago now makes rates for the whole world. You knew that Chicago was 
the greatest city in America, didn't you?" he asked. I blushingly said I 
had heard Chicago people say so. 

"This system is the outgrowth of the compact series. The grand organ 
is a more endurable machine than the compact manager." 

In the compartment directly in front of us, which was larger than any 
other, were twelve or fourteen men who seemed to be constantly engaged in 
receiving and transmitting messages through machines which spoke the 
words and recorded them in print at the same time. Everything that went 
on was audible in the "centre," but so soft and musical in tone as not to 
interrupt or interfere with conversation. 

" There are no female clerks, you see," said my host. " Women are now 
engaged as sea captains, railroad conductors, and in such like business. 
That is the finance department," he continued. " We are receiving advices 
from our investments all day long. All of our premium receipts are invested 
in lottery coupons." 

At this I started. 

"Ah, I see," he said, "you are not informed. Well, to commence: The 
national lottery at Washington is drawn every ten days and is the largest 
investment, conducted by the President and Cabinet officers. This puts 
capital and labor on the same plane. Then there are State lotteries, county 
lotteries and town lotteries, all conducted by laws enacted in the Senate and 
House of Representatives. The prizes are drawn mostly every thirty days. 
Perhaps you now see why clerks are not allowed to leave the building for 
seven years. Companies put no more faith in their employes than they did 
in your time." 

I sighed. 

"Ah, well," he said, "honesty is the best policy. It is a long way better 
than an insurance policy. 

"We have had a very good year," he continued. " Our premium receipts 
for San Francisco alone are two million dollars in round numbers, our losses 
a million and a half, and our coupons realized four millions. This is un- 
usual. Last year we were not so fortunate; our out-go was 209 per cent." 

"Millions!" I cried. "Premium receipts of millions! How can it be 

"Ah, yes, I forgot," he said. "You do not know. There are but four- 
teen insurance companies now doing business in the United States; the oth- 
ers went to the wall under the old hazardous sj'stem. That is why we have 
no solicitors or brokers. The assured comes to the office and records his 
voice and receives in return a printed evidence. His insurance is in force 
until ordered cancelled, and is paid for by the week in advance." 


"And the loss claims?" I gasped. 

"Oh, yes, about the claims. Well, each claim goes into court and is ex- 
amined b} r a jury, or, in case of appeal, by the judge of a higher court. The 
office deals only with finances. See? " 

"Yes," I admitted, uneasily; 'I think I do, but I don't quite understand. 
Have you no adjusters?" 

"Adjusters!" he said, scornfully. "No; I thank fortune we have no 
such butchers in these days. I have read of them in books, and I am vexed 
whenever I think of their abominable practices. Such of them as were half- 
way honest were wholly incompetent, and such as were competent played a 
mischief with the companies' money and reputation. No, we have no ad- 
justers. When a claim is presented it comes at first hand through the law- 
yer of the assured in the manner of a suit for the full amount of policy. We 
p y the amount into court at once and await the process of law." 

"Dear me," I said, "I don't grasp this point." 

"Don't mention it," he replied, encouragingly; "I am not surprised. 
How should you? " 

Just then we became aware of what seemed to be a faint round of applause, 
and upon looking into the left-hand compartment, saw a number of elderly 
men with happy, smiling faces, listening to an address or lecture. 

"These," said the lieutenant, "are retired officers, who have served their 
term of seven years in the chair I now occupy. One of them has been a 
general director; all are known as extraordinary men. I will not conceal 
from you (lowering his voice) that in my opinion some of them are crazy on 
the subject of insurance — but for that matter men have been so in our busi- 
ness time out of mind. These gentlemen are living on a pension at the ex- 
pense of the company. Most of them are allowed to come and go at will, 
always of course attended by a Pinkerton, so that they may not disclose the 
inner workings of the coupon investments," this in reply to an inquiring 

"These men," said my informer, with as much of enthusiasm as he had 
yet allowed himself to show, "are engaged in the inductive principle of evo- 
lution; the goal of yesterday is the starting point of to-day. They have out- 
lived such questions as local agents, fire department and water supply, tariff 
rates, legislation and taxation, forms of policies, etc., etc. Saw-tooth dia- 
grams and cube illustrations belong to the far distant past; the common me- 
chanic who dealt with such material is dead and gone to his account years 
and years ago; sweet oblivion prevents such from knowing how futile and 
childish their efforts have been. The paper of to-day, which caused the ap- 
plause you heard, is on * the survival of the legitimate,' and is an able argu- 
ment in favor of issuing no evidence of insurance other than a loss receipt." 

"But," I said, " this is gambling, this is putting the money of the people 
on the hazard of a die; millions lost last year, millions won this year — no 
stability, no guarantee of indemnity. Why, sir, the whole system, induc- 
tive or no inductive, was born in the brain of a madman and means everlast- 
ing ruin." 


' 'Sir, " replied he, severely, "do not forget that you are a privileged guest. 
"You lose sight of the fact that these stern rules of legitimate business ema- 
nate from brains of extraordinary men, bent on making money." 

4< As if," I cried, "as if history were not made up of the bad actions of 
extraordinary men, as if all the most noted destroyers and deceivers of our 
species, all the founders of arbitrary governments and false religions, had 
not been extraordinary men, as if nine-tenths of the calamities which have 
befallen the human race had any other origin than the union of high intelli- 
gence with low desire." 

"One moment, sir," said he, "is not that a quotation?" 

"Yes, sir," I replied, "it is from Macauley's Essay on Francis Bacon." 

" I thought so. I regret to inform you that your visit is at an end. One 
of the cardinal principles of the office is opposition to quotation. We are 
original in our methods, whatever else we may be." 

"Sir," I replied with some warmth, "there is little in what you have said 
to me that has not been taken from the mouths of others. Remember that 
those who live in glass houses — " 

"Stop!" he fairly howled, "don't do that; don't finish that sentence. 
That is the worst crime you can commit in this office. Pinkerton! " 

I felt that I was disgraced. I saw the uniformed dummy advancing upon 
me when a voice fell upon my ear, saying: 

"Well, dear, if you are ready we will go." 

It was the voice of my wife. I had seen the underwriter of the future in 
as much time as it takes a woman to put on "her things " and make ready 
for the theatre. 

Being a spectator only, I was enabled to take in the humorous side of the 
committee work at the State capitol. When a Senator of impressive voice 
and haughty mein demonstrates that he is but a trifle removed from a black- 
guard, it seems funny to hear him refer slightingly to our own thoroughbreds 
as "these people." When he saws the air with willing armor wakes the 
echoes with stentorian tones to prove that " the bill is for the good of all 
the people of the State." I remember what he said quietly about his promise 
to help his friend, the author of the bill, and his suggestion to me " to take 
said author off of his back," and all would be well. 

As there is no step-ladder modeled after the plan of the golden stairs, the 
author is presumed to be on his back still. 

A representative of the people in his official capacity can insult an insur- 
ance man in committee, it appears, with impunity. Watch him later on as 
he grovels at your feet in the dust of political aspirations. 

I noticed a hungry lobby, also. It recalled an experience in New Jersey. 
We were doing our best to defeat a valued policy bill. One day a stalwart 
son of political toil, a member, sought me. I gave him the best reasons 1 
had why the bill was bad. 

"Oh, that is Sunday-school talk; come down to a coin basis," said he. 


I apologized, and explained that I feared to offend him; but added: "what 
is the price of your vote?" 

"Three hundred dollars," he replied. 

"Too much," said I; "can get them cheaper. Good morning." 

His "agent" came to me later, and offered to take going rates. 

My dear Knapsack! — yes; you wonder why insurance companies don't 
get a fair deal in court. Did it ever occur to you how seldom we get into 
court? Judges are selected from lawyers, and candidates for Judges under 
forty years old are seldom successful lawyers. 

Are not insurance companies at fault in not educating lawyers? Are they 
not too timid about going to law? They submit to a hundred swindles 
where they fight one. Would they not have a fair interpretation of the 
contract if they had more cases in court? How many lawyers do you know 
who know anything about insurance law? 

Your lawyer friend is up in railroad law, land law, laws for collecting 
debts, foreclosing mortgages, removing bad tenants; up in civil practice, 
and all the phases of criminal practice, and when elected to the bench can 
decide intelligently on all points of law and equity raised by counsel in such 
cases; but in an insurance case the bench, with a few honorable exceptions, 
is all at sea. 

If a jury trial be had, his Honor's instructions will very likely wholly 
ignore the law and equity of the contract; and if a jury be waived, his Honor, 
not having had any practice in such cases, not having time to study up 
the case, and with a " d — n corporations, anyhow" frame of mind, will be 
likely to decide your case on the chances of hitting a fly on the wall with a 
squirt of tobacco juice — hitting the fly, to decide in favor of the company, 
and hitting the wall, to decide in favor of the assured; and if by any chance 
he should hit the fly the first time, would probably fire again to give the 
assured another show. 

Yes; we have the Supreme Court to appeal to; been there! Now, my dear 
Knapsack, there is one of two things to do: pay every claim, keep out of 
courts, and make the community pay the bill in the way of increased rates, 
or fight every attempted swindle, and educate lawyers who, when they get 
to be judges, will be as well posted oh the law and equities of insurance as 
on other contracts, and will give to insurance cases the same attention and 
honest decision that other cases get. You can then fight swindlers success- 
fully, reduce rates, and save money for insurers. 

Which will the Knapsack readers choose ? The latter has the hearty en- 
dorsement of yours, truly. 



The local agent is generally supposed to be a man— that is, most of them 
wear men's clothes, but I have seen lady local agents. Lady agents do first 


rate until they get married, then they don't care for anything, such as 

Local agents have strong convictions. Some of them have a strong con- 
viction that they can't get a risk — and they never try. Others have a con- 
viction that they know more about it than the man at the office, and you 
can't knock it out of them until you pay twenty per cent.; that seems to be 
an argument they can't get around. Anybody is willing to follow twenty 
per cent instructions. 

I know a local agent who made more than the company. He loaned the 
company money at twelve per cent, per annum, and bought a lot of their 
stock at ten cents on the dollar. Then he got himself elected President, 
and pretty soon he pulled the company out, paid his money back to himself, 
sold his stock for $1.35, and returned to his local agency. After that the 
company busted. I don't see how he did it. 

Local agents are like cats. You stroke them the right way, and they will 
stay quiet and be sociable, but if you rub the fur against the grain they 
show claws and howl, and get mad enough to bite the buttons off your 

It's funny how some local agents manage I know one who fussed around 
and got a fine office, and the companies paid the rent and helped furnish it, 
and painted big expensive signs all over the windows, and all such things, 
and there was a modest little man next door, who never got an extra for any- 
thing, and his commission even was never raised although he lived in an 
excepted city, and he worked right along and sent in ten times as many 
premiums as the first man, and one day, when he called attention to the differ- 
ence, his insurance office people told him to mind his own business. " There 
want any kick coming to him," and talk like that. The harder you work 
and the more you do, and the better you do it, the less thanks you get. It 
is just like the woman who poisoned her husband. No sooner had the jury 
purjured themselves, than she received thirteen offers of marriage, one of 
them from a clergyman. 

Sometimes I think a good square man has no business with insurance — 
but that is when I am bilious. Half the agents I meet seem to think the 
business is a grand swindle. They act as if they were not getting their 
share of the loot, and if you don't give more they will squeal and give the 
whole snap away, as the slangy people say. The other half work on the 
principle that it is the only legitimate calling in the world, and they abuse 
the people who don't insure with them, and give them short answers, and 
take their money as if they were doing them a favor; aud when a man has a 
loss they want the Grand Jury to indite him right away, and start stories 
about how mysterious the fire is, and tell the adjuster not to pay a cent, 
and so forth and so forth. Then, in a month or two, they write to the 
office and ask how you can expect a man to get any business if the company 
don't pay its losses. I sometimes get real cross with local agents; the only 
consolation I have is the thought that there are exceptions to the general 
run of them. 


I used to be a local agent myself, and I know bow it is. I never bad any- 
trouble, because I worked for a borne company, and tbe Board of Directors 
could make it all rigbt; but I paid a loss in full once before I adjusted it, 
because I tbougbt tbe other locals were getting away with me. I never was 
an adjuster, anyhow; and I think by tbe time tbe man's papers were finally 
made out, tbe company people thought tbey would have saved money if 
they had sent a regular adjuster. If I had to be a plumber or a local agent, 
I would be a local ageut. The season is longer. 


A "fire insurance" and a ' hail insurance' ' man met ou a train and com- 
pared notes on business. Fire man said business is bad — too many fires, 
too many losses — and observed that tbe big hail storms lately must have 
caused heavy losses under hail policies. Hail man said, no — no losses — bad 
hail storms and assured had losses, but tbe hail policies provide tint during 
a storm or at night time all crops insured thereunder must be taken in and 
put under cover, and a neglect to do this voided the policy. 

At Alturas last summer bed and board were matters of importance. Beds 
were secured with difficulty at oue end of town, while board of the most 
primitive service scarcely filled the bill at the other end of town. In the 
midd e was a waste of blackened ruins where the business houses had been. 
Every one was good natured over the discomfort, and many a cheerful con- 
versation lengthened out over the simple fare at dinner. Judge White and 
family, burned out of house and home, shared tbe "second table" with the 
adjusters, and his sweet little four year old daughter listened sedately to tbe 
oft-discussed poiuts of insurance. One day as we met on the bridge tbe 
little oue eyed me a moment, then raised her face and said, "Pa, is that the 
man who set the town on fire?" Quickly he answered, "No, my pet, that 
is the man who sets the claimant on fire, and he burns him up, too." 

Tbe Fireman's Fund sent in what I assume to be a calendar. It is a beau- 
tiful picture representing a chaste young thing, dressed in her best clothes, 
leaning out of a two-story window, and on the chest of a young insurance 
solicitor. He is imprinting with great accuracy of aim a cold salute upon 
the point of her chin. He poises himself airily with the slight assistance of 
one foot upon a rope ladder. He appears to be taking a risk. I commend 
this new manner of soliciting to the young of our profession. 

Of all the calendars received at this office, that one which bears the figures 
oi three beautiful girls on its face made the greatest sensation. Fair and 
elegant types of womanhood were they, gazing into the future with an in- 
quiring eye. But what words are these I see printed directly under their 


feet?— "Old and tried " Let us hope it is intended in some way to rtfer to 
the business of the office. 

The German- American sends in a picture of a mother and two infant chil- 
dren gazing steadfastly through an open window in quite a different direc- 
tion from the general conflagration in full burn across the street. The 
mother is carefully dressed; the children in night clothing. A clock on the 
wall plainly indicates the time to be 5 o'clock. As it is dark out of doors, it 
is presumably winter. Query, is the heat from the fire sufficient to warm 
the children, or if this is a tropical scene, as the growing plants at the open 
window indicate, in what part of the country is it dark at 5 a. m. or p. m. ? 

Calendars are no good, anyway; their use as advertisers has gone. I am 
pleased to think ''their days are numbered." I recall one issued by a prom- 
inent home company, which, aside from the lurid pigments of its composi- 
tion, was off color otherwise. It represented an attractive figure clad in an 
elaborate morning gown presiding over a table containing two bottles of fiz 
and a hot lunch. In her hand was an invitation to stand in and share the 
the refreshments. The President of the company, a country gentleman of 
the old school, was, in the language of the street Arab, "too fly;" hence 
the whole edition was suppressed. 

The Coast Review is a perennial scheme. It has the largest circulation of 
any insurance journal in San Francisco. It takes an editor and a proprietor 
to work it. 

Its proprietor is a gentleman of composed address, rich in southern blood 
and prospective revenue; an open-handed artisan, of whom it may be said 
one cannot remain in his debt. 

The editor has originality, a large head full of sense, a pocket full of pen- 
cils, and no scissors. He is not unmindful of the scintillation of the Knap- 
sack. I shall not be surprised to find a column devoted to similar intellect- 
ual coruscations in the Coast Review some day. 


The Coast Review is a friend to the special agent, and has time out of 
mind published the most beautiful tributes to the alleged ability and virtues 
of our boys. Thus far we have failed to acknowledge our appreciation out- 
side of the subscription list. Every agent's family should have its Coast Re- 
view, and in Ogden and Salt Lake two copies at least. 

Being an observer, I believe the journal to be seated on a sound financial 
basis. On the occasion of my last visit to the sanctum, I was offered a 
tobacco cigar out of a box more than half full. 

In the pursuit of crime with intent to convict, the Coast Review is pre- 
eminently beyond its local contemporaries. Let no insurance person steal 
—outside the law — and be detected, for, as soon as it is public news, the 
Coast Review will be upon him with unrelenting flaggellation. 


Its charities are well understood. No hat-passer is neglected in the dis- 

The editor and proprietor never retract. They never commit or pepetu- 
ate errors; but there is a smudgy, ink-splotched Lucifer called the "printer's 
devil," who plays the mischief in one way and another without let or hin- 
de ranee. 

If my name is George William France, I do not like to be known in print 
as Oliver Wendall French; but the Coast Review liked it, and gives me 
scathing sarcasm when I "kick." 

I wrote what I thought a clever bit of grammatical construction. The 
Coast Review devil rook a handful of type, sprinkled the word " that " many 
times over my article, washing all the elegance of diction clean out. I knew 
better than to complain. Like the man in the pulpit, they have you in 
their power — you can't talk back, whatever your inclination. 

Remember, however, it is not the editor or proprietor at fault, but the 
devil. Go to the devil, if you like, but keep away from the sanctum. 

Heaven prosper the Coast. The Coast Review can take care of itself. Now 
is the time to get up clubs. 

a wife's remedy— "an ower true tale." 

A certain old special (in experience, not age) 
Had traveled for years by rail, steamer and stage, 
And tho' he loved dearly both children and wife, 
To be on the go was the joy of his life. 
If he staid long at home, 'twas his greatest complaint 
That he seemed to be under a sort of restraint; 
When out on the road he did just as he chose, 
No one cared whether early or late he arose, 
And if such a notion got into his head, 
He might, like the chickens, go early to bed; 
His steaks, chops, bacon and eggs could be dished 
And served to him almost whenever he wished. 
It chanced that his principal (I won't call him 'boss ") 
Was forced by his business the Atlantic to cross ; 
So, seeing this trip can't be made in a day, 
Our special to manage the business must stay. 
He behaved himself well at his home for a while- 
Wife and children saw only his bright, sunny smile; 
But at length the old restless feeling came o'er him, 
And his dear wife and children seemed only to bore him. 
One night he went home and felt sure he would '* bust " 
If he did not in some way express his disgust; 
Said he, " Mrs. S., (S. for Special, you know) 
I really can't see why you manage things so; 
I never have seen such obstreperous boys, 
I think they were born just to kick up a noise, 
And as for the girls, why it really does seem 
That they do nothing else but to giggle and scream; 
That girl in the kitchen thinks I must like to wait, 


For she seldom is ready, but most always late; 

The butcher takes pains to send meat that is tough, 

And for my part, I consider life very rough." 

"My dear," said his wite, as she glanced at the clock, 

"Just pick up your grip-sack and walk round the block — 

You have plenty of time, it isn't quite six — 

And I'll do what I can crooked matters to fix." 

He promptly obeyed, or rather took her advice, 

And, grasping his satchel, walked round the block twice; 

Went back to his home in a different mood, 

The beefsteak was tender, the children all good, 

And when dinner was over he looked all round, 

And remarked that no happier home could be found; 

His wife and his children all gave him great pleasure, 

And as for the cook, why, he called her a treasure; 

Their butcher sold meat such as could rarely be found 

If you traveled and searched all this wide world around. 

Editor Knapsack — You may remember me as the individual whose letter 
on the rate book was handed you by the general agent, and which you paid 
me the compliment of printing. I can't say that I fully understand that 
book yer, but I find that I'm not so much worse off than others, after all. 
Since then I've taken more interest in insurance matters, and have read all 
I could see on the subject in the papers. I notice that the newspapers seem 
to know more about insurance than the insurance men themselves, though 
that seems strange. But what a bad time we've had of late. So many big 
fires have occurred, and we're having a session of the Legislature to add to 
the disasters. And now another insurance paper is to be started. When 
will the luck change! 

Speaking of books and papers and legislatures, I fin<l I am not alone in 
my ignorance of what is in books or ought to be in them. Even Webster's 
big, unabridged dictionary has no such word as "cinch" in it. Now, we all 
know T what that is, but Webster never belonged to the legislature, I guess, 
and never was an insurance company, so he didn't put the word in his book. 
If he had ever lived in California he would have done so. Some of his other 
definitions are bad also. For instance, he defines Cluniac as one of the re- 
formed Order of Benedictine monks, so called from Cluny in France. Now, 
Clunie is not in France, more's the pity; he's very much here, and I am 
afraid has come to stay. Cluniacension is defined as relating to the reform- 
ed discipline prescribed to certain monks. That's not at all the definition 
our legislative committee would give. The proper " ascension" in that di- 
rection would be too high for definition if they had their way. Besides, the 
reformed discipline prescribed is better adapted to ecclesiastical history than 
to the present commercial age. It is cur-ous, though, now I think of it, 
though I couldn't find * 'cinch" in Webster that I find " clunch " just above 
cluniac, in the same column, and clunch means to bend the hand or fist. I 
don't suppose there's any connection, but it's odd. 


I bear from the insurance men that the insurance men got away with the 
Legislature, but I see by the newspapers that the Legislature got away with 
the insurance men. It usually does, in one way or another — generally in 
one way. The papers say that one Senator was down on the insurance del- 
egation because they rode up from the depot in hacks, gave lunches, wore 
kid gloves, canes, clean shirts and plug hats, and drank wine at dinner. He 
said he couldn't afford to do this, especially drink wine at dinner. How 
dreadful! Probably he will after adjournment. 

I am told that one man — a veteran lob-legislative committee man— was 
complacently congratulating himself on how he had outwitted the chairman 
in that investigation before the committee, and while he was doing it an- 
other man feelingly confessed that he had been sat on hard when trying to 
suggest an answer for the first man to one of the questions, and he wanted 
to know why the first man didn't answer right up sharp when the chairman 
asked a few pertinent, or rather impertinent, questions about the compact. 
Why did he draw neighborhood improvements or other things on the dusty 
table with his finger and speak so slowly while the chairman was asking the 
conundrums. He wanted to speak correctly and conscientiously, he said. 
The second man thought it was a bad time and place to w r ait for a conscience 
to stretch, and that any insurance man of experience ought to have it well 
stretched anyhow, so as to be equal to the occasion any time. He, of 
course, speaks from experience. 

The President of this Association, in his address last year, put in big type 
his opinion that "agitation is the only means of reform/' That sounds like 
Denis Kearney or Coroner O'Donnell, but if it is true, then the insurance 
companies will presently be reformed, for there seems to be " agitation " 
enough among them just now. 

The President also says that "insurance is the most trustful of any class 
of business." Stockholders put up coin and trust directors, directors trust 
officers, officers trust department managers, managers trust specials (they 
can't help it, by the way), specials trust agents, agents trust the assured.'" 
That last is the only bad thing about the whole trust business, but this mu- 
tual trust talked about is not on faith alone. If we all trusted each other 
in this golden age manner there wouldn't be any necessity of any compact. 
You notice your President didn't say the "companies trust each other." 
He knew too much. I might put the case somewhat like your President 

Fires make business, business makes agents, agents make specials, specials 
make managers, managers make companies, companies make cut rates and 
cut rates make compacts. Then, compacts stir up public, public stirs up 
Clunies, Clunies stir up legislatures, legislatures stir us all up. It isn't, by 
the way, the fires alone that make all the bad burns in the business. 

There is a tendency, I see, to make us all honest by law. If they applied! 
this principle to all classes of business, this would be all right. We're no 
worse than others. Why scarcely a paper is read before this society that 


'does not have something to say about the necessity of our being honest and 
upright. Perhaps it is on the principle that the "lady doth protest too 
much" that they don't believe in us. Even your President last year gave 
us a nut of thought in the expression "Honesty is the best policy," but he 
failed to say what company it was in, and until we know that we can't be 

I noticed in your last year's proceedings there were more apologies than 
papers. This is both an apology for a paper. But I find the more I know 
about insurance the less I can write about it, which to my mind, reasoning 
by contraries, shows why there's so much published on the subject and so 
little said. 

Yours, etc., Nobody. 

And thus ends the Knapsack for 1887. Its sarcasm is without sting; its 
wit is harmless; its pathos melts only the softest heart; while as a whole it 
is intended to bring for the moment a sensation of pleasure to a " body of 
men" who are buckled into harness, tugging with might and main. 

If the light laugh can for one instant speak the vacant mind, the eleventh 
return of the Knapsack has fulfilled its mission. It has danced its hour in 
the sunshine, and is no more. 

Note. — The following paper is a part of (< The Knapsack," and 
created considerable discussion, which discussion follows the re- 
ply of the committee appointed to answer " Questioner" on 
page 74. 



Year after year, as the Legislature of our State meets to make laws for our 
guidance, bills inimical to insurance interests are presented, and representa- 
tive men from our profession go to Sacramento to defend our rights ( ?) so 

Perhaps this anti-Compact bill is the hardest case they have had to de- 
fend. The arguments made before the Legislative Committee, stripped of 
their verbiage, were about as follows: 

First — That by combining the experience of one hundred companies, a 
basis of rates and rules was obtained, by which the business could be con- 
ducted with a reasonable certainty of profit, and that as the public required 
insurance that insures, a Compact which assured permanency and growth of 
insurance companies was of great public benefit, especially in yiew of the 
fact that companies must lay by large sums of money against such calami- 
ties as the Chicago and Boston fires. 

Second — That the profits made from the business have been so miuute 
that there is no necessity of or excuse for hostile legislation. 


Third — That the Compact has reduced the cost of insurance by the reduc- 
tion of rates, such reductions being partly made possible by reducing the 
commission paid middle meo. 

Fourth— That the Compact has caused a great improvement in risks, by 
having removed unlawful dangers, and by insisting on the building laws 
being carried out and in encouraging towns to put in water supplies, and to 
enlarge their facilities for extinguishing fires. 

Now, just here among ourselves, let us look at these matters and see how 
far they are true. Bear in mind that these arguments were made before a 
California Legislature, and in favor of a Compact which governs underwrit- 
ing in California. 

As to the first argument that as our business has not been reduced to an 
exact science, and that as it is impossible for any individual underwriter to 
learn from his own experience just what it costs to carry any given class of 
risks, therefore it is necessary in order to concentrate the experience of all, 
that a Compact be maintained. 

No one will deny that statistics are valuable —nay, indispensable— and 
should be compiled, but does it follow that pains and penalties should be 
imposed on him, who having the experience of many companies for many 
years before him, wilfully writes business below cost ? Will not the loss of 
his own salary or interest deter him from such a suicidical course ? 

As a matter of fact, does the Pacific Insurance Union bring to practical 
use the experience of its members as to rates? As a matter of fact, does 
even the Executive Committee examine the rates before they are promul- 
gated? Is it not a fact that the major portion of the rates are fixed and all 
the surveys made by young men — bright, we admit, but whose experience 
must necessarily have been limited? Have you not all had reason to com- 
plain of inconsistencies in ratings? If all rates were founded on the com- 
bined experience of one hundred companies how could inconsistencies occur? 
Is the Compact necessary on this account? Could not some other plan, 
with less expense and machinery, bring together all necessary statistics and 
place them within the reach of all? Is it a fact that should the anti-Compact 
bill become a law, companies will be seriously injured? Will a free fight 
ensue ? 

Is it not contrary to human nature that men should, with their eyes open, 
engage in a war of rates that would reduce their commissions and possibly 
lose them their agency ? 

Do not the principal intimations of deep and dangerous knifing emanate 
from salaried managers? And do you believe the President and Directors 
(who are always stockholders) of companies will permit even these salaried 
managers to dump into the street the millions they have labored to accumu- 

In the absence of a Compact, is there a man in this Association to-day 
who believes that the company with which he is connected would permit 
him to do business at such rates as would bring the profits to nil, absorb 


the surplus and capital and then fail? A free fight is a nice thing to talk 
about, but is it not too poor a thing in practice to last long? Will compa- 
nies squander much money in that sort of sport? 

And now as to the "dear public." Is it likely that this business of ours 
will be so conducted, in case the Compact is killed by legislation, that our 
policies will not insure, so that the public will be left unprotected? 

Under the present manner of State supervision of insurance interests, 
companies are not very often allowed to impair their capital to such an ex- 
tent as to be dangerous to the insuring public. Eeserves for reinsurance are 
required, and when the capital is impaired the company is forced to make it 
good or retire, and in retiring to protect its policyholders. 

Now, is the Compact a measure for the benefit of the public, or is it sim- 
ply a scheme whereby dividends are increased and surpluses which earn in- 
terest are piled up, the burden of which is borne by the public, the profits 
of which are reaped by employes and stockholders? 

The second argument that was presented was tbat the profits of the busi- 
ness were so small that antagonistic legislation was not only unnecessary 
but was unstatesmanlike, in that it crippled an enterprise which should have 
the fostering care of the State. This may be true. Let us see. 

Is it not a fact that millions of dollars are annually paid in dividends to 
stockholders, and other millions added to the net suiplus or interest-bearing 

According to the January 27th, 1887, Spectator, out of 220 companies named 
166 made a total gain in net surplus of $5, 929,000. Eleven neither gained 
or lost, while forty-three lost of their surplus $i,341,0U0, leaving $4,588,000 
net gain in actual profits above losses, expenses and dividends for 220 com- 

These figures are of companies all over the United States where business 
is done under compacts, local boards, associations, or entirely without re- 
straint, and includes marine business, and the Insurance Company of North 
America lost nearly half a million of the $1,250,000 lost by all companies. 
But now let us look at California business alone for a few minutes, and see 
what of interest there is here. 

From 1871 to 1885, both inclusive, the premium in- 
come in this State was.. $53,168,126 

The losses during same period $18,339,445 

The expenses, estimated at 35 per cent 18,606,844 

36,939 289 

Net profits for 15 years 16,228,837 

Or an average annual profit of 1,081,922 

Of this amount about one-quarter was made by home companies 4,057.209 

And three quarters by Eastern and foreign companies, or 12,161,623 

If these figures cover too long a time, let us look a': the results of the last 
six years, from 1880 to 1885, both incli s've: 


Premiums $24,716,208 

Losses $9,051,205 

Expenses, 35 per cent 8,650,672 


Net profits in six years 7,004,331 

Average profits for past six years 1,167,388 

It must be borne in mind that these figures represent only net profits of 
the^re insurance business. 

Insurance capital draws its own interest, the same as any other; and while 
it stands ready to pay the losses if they should exceed the premiums, yet its 
earnings can not be considered any part of the profits of the insurance busi- 
ness. Interest arising from the investment of net surpluses, and in fact all 
reserves, save the capital, is a legitimate profit of the fire insurance business, 
and comes in as a sort of compound interest, or profits on profits, so that the 
actual profits of fire insurance in California for sixteen years actually exceeds 
$ 16,000,000 by a very large sum. 

The actual profits to California companies from their fire business in Cali- 
fornia is sufficient to pay in addition to all salaries and expenses (no small 
item) over 7 per cent, per annum on the average capital invested. This, in 
addition to the interest earned by the capital and other assets. 

California business has been uniformly profitable for sixteen year*, save 
the one year, 1871. 1886 was considered an unusually hard year, and yet 
the profits on California business were $716,381, as shown by the Insurance 
Commissioner's Report, counting expenses at 35 per cent. 

Now the question arises: Are the profits of the insurance business in Cali- 
fornia small ? Does not California send millions of profits made in the 
business, out of the State ? Are not other millions disbursed in dividends 
in the State ? Ha*e not our local companies built up quite a neat net 

And now as to the third argument, that rates have been reduced 15 per 
<;ent. since the organization of the Compact, and that therefore the public 
should be satisfied. By an examination of the Coast Review Chart we may 
learn that the average rate in 1884 was 1.51% percent.; in 1885, 1.61 per 
cent.; and in 1886, $1.68 or 11 per cent, more than in 1884, an apparent 
difference of 26 per cent, between the Coast Review statement and that of the 
Committee. Rates have probably been equalized, but can we believe they 
have been reduced ? 

In 1884, when the Old Board was on its "last le^s." and when its rules 
rested lightly on its members, and when the California Underwriters' Asso- 
ciation simply prevented its members from taking business written the pre- 
vious year, from any member, at a less rate than that obtained by said 
member, but which in no way prevented its members from writing at any 
rate or under any form that they chose, with the one exception named, and 
when there were several offices outside of any organization writing just as 
*hey pleased, the avtrage rate obtained was 1.51J. Had 1886 business been 


written at the same average rate there would still have been a profit of over 
$200,000, and this in a year acknowledged to have been exceedingly bad in 
this State of small ratios of loss. 

The difference in the advanced rate in 1886 over 1884, on the total amount 
of premiums was over $500,000 in favor of the companies. 

In 1871 the loss ratio was 77 per cent. — the highest reached in sixteen 
years. In 1874 and 1875, the ratio was 25 per cent.— the lowest mark 
reached. The average for sixteen years, including 1871 and 1886, (the two 
hardest years) is 36 per cent. Had 1886 taken the average loss ratio of 36 
per cent, the profits would have been $1,503,903. 

Now is it a fact that the commissions paid to middlemen have been de- 
creased ? Are not nearly all the men who control any considerable line of 
business on the pay roll of some office or another ? Are not most of the 
offices paying from 20 to 30 per cent, for the bulk of their business ? Have 
rates been reduced because middlemen make less ? 

Now as to the fourth argument. Should the work of improving water 
supplies, taking down stovepipes and furnishing fire apparatus be a part of 
the work of an insurance organization ? 

We must admit that the Compact has done good work in this line, and 
has benefited the public, even if the public has paid the expenses and paid 
premiums on top of expenses. 

Now passing the necessity of a Compact, and the questions as to whether 
it subserves public good, let us look at it from the inside and from the un- 
derwriters' standpoint, without reference to the ''dear public," and see 
what it is good for. 

No doubt uniformity of rates is a good thing, and saves a deal of bother to 
managers, specials and countermen. It is a good thin.* to protect the broker 
in his legitimate profits. It is a good thing to secure uniformity in forms 
of policies, It is a good thing to have officers to enforce the building laws. 
But are these things all realized in our present system ? What advantage is 
there in established rates if rebates are made ? How is the broker protected 
if commissions are divided with the assured ? 

Has not the Compact drawn upon itself the public condemnation, and is 
it not called a monopoly? Has it not multiplied the brokers, reduced the 
direct business, and bound brokers by an agreement which is broken by the 
dishonest to the great discomfiture of the honest broker? Has it not im- 
posed heavy expenses on its members without accomplishing all the good it 
should? Is it not a combination which, though unintentionally, actually 
puts a premium on dishonesty or bad faith? Does not it enable the incapa- 
ble to catry on the business by furnishing rates and regulations leaving lit- 
tle inducement to practice self-reliance? Has it not resulted in much lying 
and perjury? Has not General Manager Stillman so stated? Are there not 
rules which are openly and constantly violated, not only by subordinates 
but by those who framed or voted for the laws themselves? Is not rebating 
and dividing commissions undermining and disturbing the whole organiza- 
tion ? Do not the large and influential companies reap the beii' fits at the 


expense of their small competitors? Is it not a weakness that solictors are- 
not directly pledged to abide by the regulations of the Union? Should not 
the rules regarding the payment of solicitors be enforced or repealed ? 

Would it not pay to expert the books of the members and occasionally ex- 
amine the managers or general agents, under oath, as to their manner of 
conducting their business? 

Is it true that the General Manager is powerless to enforce the rules be- 
cause some members would withdraw if he did? Is it true that the Compact 
is on the ragged edge even if legislation is buried? Could not the Compact 
be made to satisfactorily perform its functions? Is it true that the Compact 
is a public benefaction ? QUESTIONER. 



The paper of the querulous querist is fairly bristling with points — inter- 
rogation points — " crooked things that ask questions," and often suggest 
"crooked" inferences. There are half a hundred of them, and the number 
might easily have been doubled had the writer gone on about as follows:: 
"Is insurance business a failure?" "Is not the world full of imperfec- 
tions?" "Is not biliousness chronic in the underwriting fraternity?"' 
" Is it not easier to detect disease than to propose remedies?" "Cannot 
more questions be asked in a minute than can be auswered in a week?" 
" Does the fact that a week is not taken within which to answer said ques- 
tions prove that they are unanswerable? " etc. 

The writer was at first disposed to give careful reply to each query, but 
soon found that the time at his command would not permit him to write 
the volume which the time at the command of his fellow underwriters would 
not permit them to read even when completed. Hence this excuse for fail- 
ing to give categorical answers to the conundrums propounded. 

The inference to be derived from •• Questioner's" paper is that there is- 
something wrong about the insurance business as conducted on this coast, 
but he does not suggest any plan for improvement, and it might therefore 
be in order to ask him what he proposes to do about it. Just to show how 
easy it is to ask questions the writer propounds the following: "Is it desira- 
ble that the infliction of pains and penalties for violation of rules and rates- 
should be discontinued, so that, as in the past, the more reckless companies- 
should score a loss to both stockholders and customers, and the more con- 
servative companies be weakened by their efforts to meet an irresponsible- 
competition, thereby reducing the value of the security offered by them?" 
Does not past experience prove that loss of salary or interest does not deter 
the manager from the "suicidal course" indicated by writing business below 
cost? Have not even the most couseivative companies heretofore engaged 
in a "free fight," hoping that their greater strength might enable them to- 
last until their weaker competitors were dead, and looking forward to the? 


formation of new combinations, after the battle, whereby to retrieve their 

Are not the rates of the Pacific Union based upon those of the old Board 
of Underwriters, which the experience of many years has proven to be 
equitable? Are the rates "fixed" by "young men" any more than the char- 
acter and construction of a building is " fixed " by the maker of a fite map? 
Do not the "young men" apply the rules which are given them to the facts 
as they find them, slight coocessions being made when such peculiarities of 
construction or occupancy as cannot be provided for in general rules exist? 
So long as the world is less than perfect, shall we not have occasion to com- 
plain, not only of inconsistencies in ratings, but in all departments and 
avenues of life? For instance, is it not inconsistent that an association 
formed for the purpose of "promoting the inteiests of its members," as 
stated by resolution at the time of its organization, should, at a critical time 
in its history, when the judgment of the great majority of its members en- 
dorsed tbe Pacific Union, be used as the medium thiough which to question 
the necessity for said Union's existence— at a time, too, when the mere ask- 
ing of the questions, however easily answered, could not fail to work an 
injury to the business, and indirectly to this Association and its members? 
In order to make inconsistencies "impossible, " would not the machinery for 
combining the experiences of all the companies have to be more perfect than 
any ever invented? If absolutely perfect machinery could be invented, 
would it not be so cumbersome as to be impracticable? Because machinery 
is not perfection is that any reason why it should not be used at all? Be- 
cause "some other plan" could be devised for accomplishing the same 
results is that any reason why a plan already successfully tried should be 
abandoned? Could not half a hundred questions be raised about any plan 
.that might be adopted? -Do not men engage in wars of rates without having 
1heir "eyes open," and is not warfare, which must result disastrously to a 
great portion of the contestants, strictly in accordance with "human nat- 
ure," as proven by history from the beginning of the world? While compa- 
nies might not permit managers to "dump into the strtet" the millions they 
liave accumulated, might they not, in the future as in the past, permit them 
to pile them upon the graves of their weaker brethren, hoping for living 
profits after the underwriters had been killed off and thus buried — after the 
Jiiourning public had learned by experience the necessity for adequate rates 
and for the repeal of antagonistic laws? While all fights are " poor things," 
do they not generally "last long" enough to leave a crop of dead and dying? 
Just in proportion as the proposed law to which "Questioner" refers had 
promoted a continuous free fight, would not the security to policyholders 
-have been eventually weakened ? Did State supervision prevent the failure 
•of the Farmers Mutual of California ? Did it prevent the failure of numer- 
ous companies at the time of the Chicago and Boston fires — compan- 
ies that might in many cases have survived those calamities had not 


such a demobilization of rates as " Questioner " seems to be longing for, ex- 
isted prior to the occurrence of those conflagrations ? Is not the "Compact'* 
for the benefit of both the assured and the stockholder, increasing the value 
of the policy to the one, and that of his stock to the other ? Ought it not 
to be a "fact that millions of dollars are annually paid in dividends to 
stockholders?" Wiry, bless your innocent soul, what do you suppose people 
invest money in any enterprise for ? If you plant potatoes do you not ex- 
pect a " dividend " and a " surplus" for next year's seed ? Do the millions 
to which you refer represent an excessive profit when the magnitude of the 
business and the risks of exceptional disaster which cannot be fully guarded 
against are taken into consideration ? 

Referring to "Questioner's "California figures, does he realize that " one 
swallow does not make a summer ? " Does he realize that the entire State 
of California is only about as large in population as the City of Philadel- 
phia ? Does he realize that sixteen years in the State of California only 
yields such premium income, such experience and such benefits of the law 
of average as would be obtained in the entire United States in eight months? 
Would he straightway reduce the rates in the United States, because for 
eight months the business had been profitable ? Does he realize that nearly 
45 per cent, of the premium income of the State of California is derived from 
a single city, built largely of wood, and in which, as strongly intimated by 
the experien' es of last year, it is quite possible that a conflagration may 
extend entirely beyond control ? Does he realize that it is proper to base a 
rate upon exceptional conflagrations likely to occur in the future as well as 
upon those of an ordinary character which have taken place in the past ? Is 
it not the exceptional conflagration in the nature of a public calamity which 
is possible only in the large cities, that Cperhaps at intervals of many years) 
brings up the loss ratio in those cities to the average ? Where forty-five 
per cent, of the experience of a State is derived from a single city built 
largely of wood, is it prudent to reduce rates to the figure which would be 
suggested by ordinary loss ratios ? 

The reader's patience should not be further tested by the application of 
" counter irritant " queries to the numerous interrogations that occur in the 
concluding portion of "Questioner's" paper. A "blanket" plaster ta 
cover the whole lot may be applied in the shape of the conundrum — " Is 
this world less than perfect — are we ' all poor critters ? ' " 

The foregoing excuse for not making an answer to " Questioner's" queries 
is hastily submitted by a committee that was able to act only to the extent 
of one-third of its membership, and said "third" so busily engaged in new 
duties as to suggest, that of all members of the association, he was the very 
one that ought not to have been placed upon the committee at all. 

EDWARD BROWN, V Committee. 

San Francisco, April 6th, 1887. 


Mr. E. Brown — Is it in order to discuss these papers ? 

The President — If the editor of the Knapsack is willing to be 
interrupted at this point, yes. 

Mr. Grant, the editor — Mr. President, and gentlemen, I wish 
to say that if the members like to discuss these papers, it is 
always in order at any stage in the proceedings of which the 
Knapsack forms a part. I should very much like to hear some 
discussion. Let me say that the editor of the Knapsack is not 
responsible for everything in the Knapsack. It is his duty to 
present it. He hopes to hear some discussion on this floor. 

Mr. A. E. Gunnison — Mr. President, I am glad to hear that 
the editor is not responsible for all that is read from the Knap- 
sack, for I had thought, when he was gone, of criticising him. 

Mr. E. Brown — I think it would be short-sighted on our part 
to let that paper — the one prior to the last one — be read and 
passed over without some remarks as to its character. I think 
anybody here, who is an underwriter, must know that the argu- 
ment—if it can be called an argument — as to the amount of 
profit made in the State of California by the insurance com- 
panies, is a very short-sighted argument, indeed. The insur- 
ance companies doing business here, do not confine their busi- 
ness to the State of California; their business is extended all 
over the Coast. Why did not the gentleman who prepared that 
paper, give the figures for the Pacific Coast instead of the State 
of California ? He would have found, then, that his total of 
profits would have been very materially reduced, and that the 
iusurance companies have been robbing Peter to pay Paul — if 
that is a proper expression to use in connection with this busi- 
ness; that is to say, that if they have made a certain amount of 
profit in California, it has been handed over to the people of Or- 
egon, Washington Territory, Arizona, and even Utah, to make 
good the losses there. You can not take the experience of any 
one State as a standard of the profits and losses, any more than 
you can take the experiences of any one company. It is true 
that, as a business argument, you can take the returns of any 


one State — it might still be further narrowed down — you might 
just as well take the profits and losses of the county of Alameda, 
and argue from that that the rate of charges is too high. The 
writer of that article might have gone over and taken the expe- 
riences of the residents of the town of San Leandro, and argued 
from that, that the rates for the Pacific Coast are too high. I 
simply want to enter my protest against that article being read 
and going forth to the public without something being said as 
to the errors in the calculations there made. It is not really a 
business article. [Applause.] 

Mr. T. A. Mitchell — I feel very much like Mr. Brown, and I 
would like to have it withdrawn — would not like to have it pub- 

Mr. C. F. Mullins — As this is the property of the Association 
now, we can do as we please with it. I was going to say I do 
not care; but I do care about it, and if it was my own brother 
who wrote it, I should tell him that I thought he had made a 
mistake, and a very serious one, as to the statistical part of it. 
[Applause.] Of course, I can not say anything as to the cor- 
rectness of it as to the figures, but I do know as to the boys 
making rates — as to young men tramping around the country 
rating property. Young men are not tramping around the 
country rating property. Young men are going around the 
country surveying property, and reporting the same, and are 
being paid for their services. And some of those young men 
are bright young men, too. The rates are fixed by the Execu- 
tive Committee, notwithstanding that the statement is made 
that they are not so fixed, and that they do not know anything 
about them. The whole system of rating by the committee was 
on the schedule basis of a flat rate for the entire Coast, with a 
certain figure as a minimum, with additions for this defect and 
the other defect, and certain tables for exceptional charges, and 
a variety of things which attend each particular risk, and treat 
it upon its merits. The schedules were further considered by 
the Executive Committee, and the flat rate was adopted — I am 
speaking now, of course, of the specially-rated towns, and not 
of those coming under the various books in the unrated towna 


— and the bulk of the business is to-day rated. These sched- 
ules are subject to one town that is entirely frame in its con- 
struction, no facilities for extinguishing fires, along the foothills; 
mountain towns, where the maximum amount of moral hazard 
exists, etc. We say they are charged flat. Those that have 
some facilities for extinguishing fires, are reduced, etc., and it is 
graded right through a particular town. The work that the 
boys are doing is not in making rates, it is merely furnishing 
the matter, and the rates are made by this schedule, which are 
based on experience— if the men selected for the Executive Com- 
mittee of the Union, at the time that schedule was made, are 
supposed to represent anything in the insurance business. 
Another remark was made just now in regard to the increased 
surplus in the States, for the last year. There was a statement 
in regard to the surplus, but I did not hear how much should 
be deducted from that for capital that has gone out of the busi- 
ness, or for the companies that had impaired their surplus. I 
did not hear one word as to the difference in the stock on the 
31st December, 1885, and the 31st December last year, when 
there has been a material increase of value in securities. And 
a large proportion of the surplus has got to be deducted for 
what was lost in the business this year; a large pro- 
portion of it has got to be deducted for the busi- 
ness that was insured. The statement, from the beginning 
to the end, is an unfair and improper one; and regardless of 
whom it may strike, I move that the paper signed " Question ;> 
be not printed. 

Mr. Mitchell — I second the motion. 

Mr. Geo. W. Dornin — While I feel, in company with others, 
a great deal of surprise at the paper just read, still I think it 
would be exceedingly unwise for us to be so sensitive now as to 
object to the publication of the paper. Mr. Grant has just 
stated to me that the paper is sent as a reply to the statements I 
made before the Senate Committee, in answer to remarks on my 
part that were hastily prepared and introduced before the Com- 
mittee, when we could only deal in generalities. But I believe 
that the paper is valuable; valuable because of its mistakes; be- 


cause of its false conclusions; but nevertheless valuable because 
it shows the system under which we are working, from the 
standpoint of some person outside of it, who is not familiar with 
its working. Now the public is interested in this movement; 
the public is interested in the arguments that are employed on 
either side; and I think that everything w r e can do to educate 
the public is in the right direction, whatever may become of these 
bills, whether the compact is to live or go down; whether it be 
something like systematic effort to conduct your business, or 
whether it means the chaos that will come inevitably. I believe 
we will lose nothing by discussion; and while I think discussion 
now will be inopportune, because we are all much surprised, 
yet I think it ought to come up. The question of propriety 
arises at this time, for the paper ought not to go abroad. 
It ought to be kept within these walls until we have gotten up a 
reply to it. For, as Mr. Mullins has stated, the figures are 
false in themselves; that the writer is indulging in averages of 
rates, without taking into account the large increased risks of 
these manufacturing depots, of the large grain warehouses that 
the companies have been taking. All these have increased the 
rates. It was asked me in the Senate Committee the other day 
by an attorney, what had the price been reduced ? I turned to 
my colleagues and asked them for information, and on their 
statements, and my own information, I answered that the rates 
had been reduced 15 per cent, in San Francisco, a horizontal 
reduction, as I called it up there, had been made of 15 per 
cent, on dwelling houses. I know it has been done down town. 
Each of us recognize the peculiar defects existing in the com- 
pact system. It is a great piece of machinery, uncertain in 
many of its operations, and defective in many ways. But form 
will come in if we live long enough, and if anybody on the out- 
side will tell us where the defects are, I think that ought to 
do us good. 

Mr. Mullins — I will say one word more. My motive for not 
printing this is not personal. The gentleman who wrote it 
knows who it was, I do not; therefore, it can not be personal. 
I have no objection to the world at large knowing all there is in 


regard to insurance — all there is in regard to the Pacific Insur- 
ance Union. That organization has nothing to apologize for; 
nothing that it can not justify. What I do object to is, that in 
printing this matter with the other it will go forth with, if I may 
so term it, an official stamp as the official utterance of the Asso- 
ciation — with the endorsement of the Association; and the out- 
sider looking at it will quote these figures thus and so — the 
Underwriters' Association of the Pacific says "so andso." I 
have no objection to anything that is correct that is said by the 
Association; but some of the statements of the paper are abso- 
lutely incorrect. Speaking of advancing the rates, why! if the 
members will refreshen their memories — I can not give the ex- 
act figures, but stating them from memory — the Union went 
into existence about the middle of 1884. In the year 1885, I 
am sure that the returns from the Department of Buildings 
showed that there was a very material increase in real estate 
values in this city. Buildings were going up to the right and 
left of us; you could not take a ride on the cars but they were 
building here and there — values increasing on every side. Not- 
withstanding that fact, and the larger amount of insurance that 
was done in this city, the premiums paid in the cit} r of San 
Francisco for the year 1885 — the year that the organization 
started — were less than they were the year before. A.nd I 
maintain that the Union has been beneficial to the public in its 
ratings. I do not mean to say that they have been beneficial to 
the planing-mill man or to the theater man, but that they have 
been beneficial to 80 per cent, of the insuring community of the 
State of California. Look over the State of California, with 
very few exceptions, in the mere item of dwelling houses alone; 
look at the large reductions. But it is unnecessary for me to 
go on discussing this, for you know the fact as well as I do. 
The objection I have to its going to print is that erroneous stat- 
istics should have the endorsement of this Association. If we 
let them go to print, we will afterwards have them thrown in 
our teeth as official utterances. 

Mr. Geo. F. Grant — As the so-called editor of the Knapsack, 
I think it is right that I should protect or defend my contribu- 
tors to this extent; that all members of the Association were 


requested to contribute their thoughts, and this member of the 
Association has done so; and there is no question about this 
being a part of the proceedings of this meeting. It proves to 
be a very considerable part, for it is the first paper that has cre- 
ated discussion of any kind. Now, if we allow everything 
which we favor, and to which we agree to go in, and suppress 
everything which in any way we disagree with, we have a one- 
sided sort of a business association, and we are running in a 
groove. There is no danger that there are any statements or 
figures in this paper which will give a wrong impression after 
the discussion which we have listened to, and which also goes to 

As this is just one-half of the Knapsack, which this year 
proves a very large paper; the other half to be read to-morrow, 
the Knapsack is open to a paper in contradiction to what has 
been said on this subject, to be read to-morrow, or to be printed 
without being read at all as a part of the proceedings of this 
meeting. I do not think it is right; I do not think it is fair; I 
do not think it is just to ourselves, or to the gentleman who 
wrote this paper, who is an insurance man, in the insurance 
business, a member of this Association, and entitled to all the 
privileges of this floor, to suppress that paper. The fact that the 
gentlemen have ably refuted many of the statements that have 
been made, the fact that following that original paper may 
appear a brief answer to it, stating concisely what has been en- 
larged upon by the speakers here, which paper goes in as a part 
of our proceedings, it seems to me it would make the whole 
complete to publish this. I would like the gentleman to with- 
draw his motion. It is only fair and right that all the proceed- 
ings of this meeting should be included in the annual report. 

Mr. Mullins — I did not mean to say anything more, but I am 
asked to withdraw the motion, in view of the matter being one- 
sided, and that answer can be made to-morrow. An answer 
can not be made to-morrow. The remark has been made that 
an answer can be prepared and printed in the records of the 
Association without having been submitted to this meeting. I 
think that nothing should be printed in the records of this Asso- 
ciation that is not passed upon. It cannot be one-sided; it is a 


matter that rests with the body of the house whether they pass 
it or not. There is nothing one-sided about a majority vote. If 
the majority decide it should be passed, then it is the feeling of 
the Association. I therefore cannot withdraw. 

Mr. A. J. Wetzlar — It is very evident that some young man 
who receives the benefit of the Association has, in his inexperi- 
ence and ignorance of statistics, presented a paper in the Knap- 
sack, which we are now discussing; has presented it erroneously 
in such a shape that the public will be misled by it. The gen- 
eral public are not going to be interested in the other side of the 
argument. It is an erroneous argument, and will create a 
wrong impression. To my mind, we are an association gotten 
up for mutual improvement, knowledge and benefit. We can 
not be all of the same thought and mind. The young member 
evidently has ideas of his own, and has expressed them and sub- 
stantiated them with an array of figures which I have not the 
slightest doubt can be easily gainsaid, and the error of his ar- 
guments be shown to himself. He has presented erroneous 
figures. It will take some little time to investigate and prepare 
to show him the error of his whole stand and argument. At 
the same time we are desirous here of promulgating good for 
the profession, and not to create wrong feelings in the commu- 
nity; and I think, as an organization of this kind, we have a 
right ourselves to say which of our proceedings shall go forth to 
the public, and which shall not. Though the Knapsack is ed- 
ited by one of our ablest members, it does not follow that if 
there is anything in the Knapsack which does not meet the ap- 
proval of this Association it must necessarily be printed. I am 
more in favor of the paper being withdrawn temporarily, and 
being brought up for discussion at some future meeting of this 
organization than at the present time, so as to enable us to pre- 
pare to effectually gainsay the erroneous statements that have 
been made. 

Mr. Carpenter — I can hardly agree with Mr. Wetzlar. I can 
hardly believe that any young man of this Association — though 
I did not hear the paper read, but judging by the remarks 
since, I can hardly think that any young man wrote that paper 


for the purpose of expressing his views. I think he wrote that 
paper for exactly the purpose that has been accomplished. He 
wanted to give something to talk about. He made these state- 
ments knowing that they could be refuted, and made them' for 
the purpose of getting the members interested, and giving them 
something to talk about, and he has accomplished that object. He 
wrote that paper as a member in a debating society comes up 
and takes what he knows to be the wrong side of the argument, 
for the purpose of giving the other members of the Association 
something to talk about. He did not think when he wrote that 
paper, of the false impression that might be created by having 
it published as a part of the proceedings, or he would have hes- 
itated before doing it. 

Mr. Gunnison — I would ask the editor if these two papers in 
answer to " Question/' were written by the same party? 

Mr. Grant — They were not. 

Mr. Gunnison — I got that impression from what you said. I 
can not see why any member of this Association should raise 
any doubt about the Compact system. There is nothing in that 
paper that is absolutely settled. It is asking questions. It 
reminds me of a lawyer who looks at the witness on the stand, 
and says: ° Have you ever been in Australia ? Yes, sir. Were 
you sent there by the Government of Great Britain ? No, sir. 
(Indignantly.) Do you pretend to say that you were not sent 
there by the Government of Great Britain, sir ? No, sir; I was 
not." And he goes on in that way trying to affect the character 
of the witness before the jury, simply by asking questions that 
he knows would be answered falsely, if answered as he would 
like them to be answered. Now it seems to me that the writer 
of that article has raised all those questions, and signed it 
" Questions," to ask if the Compact has not done this thing; if 
the Compact has done such a thing; if this is so and so. Now, 
may be he did not know himself whether it was so or not. I 
would suggest, although I do not like that article, that it does 
go to publication, and that a committee be appointed from the- 
members of this Association to write an answer to it, to appear 


in our minutes. Every one of these questions can be answered 
in favor of the good conduct and business-like conduct of the 
Compact, in every way. It would perhaps be the best thing in 
dbha world that we can do. 

Mr. Mel — I agree with Mr. Mullins fully; I hope the matter 
will be dropped right here. It looks not only as though it was 
done in malice, but as if it was done by General Clunie or Cap- 
tain Burns. For my part, I am a young member here. I had 
no idea debates were going to be allowed in this round-about 
way — by one writing a letter and another answering it — and I 
don't think it is beneficial to be wasting our time in this way. If 
it is necessary to get a third seconder, I second Mr. Mullin's 

Mr. G. F. Grant — I wish to correct a wrong impression. The 
paper was brought to me by the author, with the request that I 
Avould read it, saying that he did not suppose I would publish 
it — but there it was. He had written it, as he said, in a little 
different strain from the usual run, but it was his opinion. And 
he is an intelligent man, an insurance man, and a member of 
this Association — and it is his opinion. 

I read it — I did not like it and I will tell you what I did. I 
referred it to Mr. Stillman, our Manager, and Mr. Stillman 
handed it back to me without comment. But when I asked him 
if he objected to its going in as a part of the proceedings, he 
said, no. There is the history of the paper up to the time that 
it was read here. I claim for that paper that it has created a 
discussion which is useful to the young men of this Association. 
And that is what this Association is for — the education of the 
young members. This paper does not meet the approval of 
many of the members, it is true; but I have heard papers read, 
I have read them in print from sister Associations, where there 
were many things in them that I did not like, and that many 
underwriters did not agree with. You may remember a paper 
read by Mr. Dargan, of some southern State, which created a 
great deal of discussion, not only on the floor of the House at 
the time, but in the insurance public print, and I claim that 
that paper, as this one and all papers that create discussion, do 


good, and I say that it is an evidence of weakness to try and sup- 
press anything written. This paper gives evidence of not having 
been written hastily. It takes time to collect these statistics, 
even if the statistics themselves may not be correct. The paper 
gives names and dates. Now let any gentleman who chooses, 
answer it in any other way than has been presented already. I 
jfehink it is proper, I think it is right, I think it is fair, that the 
proceedings of this meeting should be published as they occur. 

Mr. D. M. Bokee — The remark, of the editor, that the writer 
said he did not think he should print it, seems to me to show 
that he really thought it was not a proper thing to bring here. 
Then in the next place that is not a hastily prepared paper, and 
it seems to me that if the public take it up and believe it is a 
carefully prepared paper, they will read that and not read the 
argument on the other side. They would say this is from a man 
who is in the business and knows much more about it than we 
do, and this is a much stronger argument than a dozen papers 
could be that are prepared by us. 

Mr. E. Brown — I think after the discussion that has taken 
place, and that there are some gentlemen here who are taking 
notes with the idea of printing them, that it would be a great 
deal better to publish the paper than to suppress it. I think if 
we suppress it now, after the notice that has been drawn to it, it 
would be a great deal more dangerous than to publish it. But 
the idea should go with it, as expressed by the members of this 
association, that it is a false and erroneous paper from beginning 
to end. While these figures may possibly be correct — we cannot 
say whether they are, for it would take hours of research — while 
they may be correct it is only a compilation of figures, and fig- 
ures may be made to say anything. You can bring others to 
bear on them and make figures present a different impression. 
The whole falsity of the argument lies in this, that the gentle- 
man, whoever he may be, has taken one State, one forty-fifth or 
one forty-sixth geographical division of the United States, and 
because that State has for a series of years been profitable to the 
companies, he therefore uses the argument that there is no 
necessity of keeping up rates, and that rates may be reasonably 


and satisfactorily reduced. That argument is acceptable to th& 
public because they are not skilled in the business of underwrit- 
ing, and only consider it superficially. It is just the superficial 
view that a person not connected with the profession might be 
likely to take, and there is the danger of the paper itself. Any 
one knows, who has given any thought at all to the business of 
underwriting, that you cannot take a section of the country and 
argue from figures presented by that section, where the rates are 
too high or too low, for each particular section of the country 
contributes to the entire loss average of the whole. If you argue 
on these false premises, you might just as well argue that the 
city of Chicago should be cited with the entire Chicago loss of 
$84,000,000 — or whatever the loss may have been. Or you 
might argue that the property owners of the city of Boston 
should be compelled to pay the immense loss in the large fire in 
that city ; whereas, it is well known that the losses were made 
good from California, from New York, from Pennsylvania, from 
Georgia, and from every State and Territory in the United 
States. It is the contribution of the many to make good the 
loss of the few. And any insurance man, who reads a paper 
and argues that because a certain small section has been profit- 
able to the company, that therefore the rates can be reduced in 
that section, leaves out of the argument a very potent element, 
that the next twenty-four hours may reverse his figures alto- 
gether. Suppose that in the next twenty -four hours we have a 
large conflagration in San Francisco, where is the value of such 
an argument then. These points the writer does not present, 
but presents a false and superficial argument to the public, and 
the public is not likely to analyze it. There is the danger. 
But there having been so much attention drawn to it, I think it 
would be better now to publish than to suppress it. 

Mr. Dornin— I agree with the last conclusion of Mr. Brown. 
While I think it is an unfortunate and ill-timed paper, yet it 
having been introduced, it is certainly our duty to take proper 
note of it, and at the proper time I shall make a motion that it 
be made a special order of business for discussion at our next 
meeting, when it will give an opportunity to examine it, and with 
proper statistical matter refute what is necessary, and do what- 


ever else may be required to get the subject fairly in print, when 
it is published in the proceedings. If we do otherwise we will 
admit that we are hurt, and those of us who desire to see the 
Compact system maintained — and I believe that we are unani- 
mous in that proposition, or nearly so — would do ourselves 
injustice if we admit that the matter is not worthy of discussion. 
As to the working of the Compact, every gentleman understands, 
and I, as they, believe we should be ready to meet it from the 
standpoint of those who are crying to break down the organiza- 

Now I make a motion that this matter go over until next 
Tuesday and be made a special topic of discussion. There are 
certain reasons, of course, that we all understand without dis- 
cussing them here, why would it not be well to have a matter of 
this kind go into print at this time ? We have a burden to carry 
without a giant powder bomb being thrown into our midst as 
was done last week at the theatre. 

D. J. Staples — My opinion is, on looking into the paper and 
listening to the remarks made, that the principal objection is 
that we cannot follow it in all its channels. It will be taken and 
used in the future as an argument of fact, while it is an ex-parte 
st itement. There is where it is going to do the real harm. We 
cannot reach this and correct it at every point, or perhaps not in 
the next Legislature, if it is allowed to go to print to-day as has 
been proposed. The papers will not put in verbatim the debate 
of to-day or of to-morrow, and the matter will be quoted every- 
where. There is where the mistake is of allowing it to go to 
print. I think that the paper, as the editor of the Knapsack 
says, is a paper to be read by this association, if this association 
is by itself, but it has opened its doors to anybody; and discuss 
it in public before we discuss it among ourselves, then we do 
ourselves injustice. 

Mr. Farnfield — I do not wish to prolong this discussion at all, 
but would just say that we cannot dictate to the members of the 
press what they are going to publish to-morrow morning. So 
far as our own publication is concerned, it will not go to print 
for a couple of months, so that we have ample opportunity to 


discuss it, and it would be better to consider it calmly rather 
than force a conclusion one way or the other to-day. 

L. B. Edwards — I second the motion of Mr. Dornin. This 
association is not composed solely of members of the Pacific 
Union. There are men here who have no voice in the Pacific 
Union, and only see its defects of working in the country as they 
are traveling around, and who are very much annoyed by viola- 
tions of the Pacific Insurance Union. I imagine that some member 
of this organization is pouring forth his wrath for the annoyance 
that he has met with in the country, in consequence, I might say, 
of bad faith on the part of members of the union. I think he 
should be permitted to express himself here. This was an 
organization originally, I believe, for the mutual protection and 
benefit of traveling men. Managers were afterward admitted 
because they had ideas sometimes, but the object of the organi- 
zation is to instruct and help ourselves, and give us an oppor- 
tunity, once a year, to vent our ideas. We are not admitted into 
the august presence of the managers w 7 hen they are discussing 
the deep and weighty measures of fire insurance on this coast. 
But we are admitted here, and we have a chance and I believe 
in giving the "boys" a chance, and I think it would be very 
unjust to attempt to quash it just now without further consid- 
eration, and for that reason I second the motion to postpone. 

The Chairman — Allow me to remark that it is somewhat un- 
certain whether we can have this room on Tuesday or Thursday. 
I know we find it difficult to get the room on any special occa- 
sion. Why not refer this matter to a committee, and then call a 
meeting when they are ready to report ? 

Mr. Gunnison — that was my suggestion, and I would rather 
prefer that the resolution should have taken that shape than to 
set it for a fixed date. My idea was this: that it was not to be 
published in any paper, but in the proceedings of the Associa- 
tion, and that a committee would have ample time to answer it. 
I had no idea that minutes would be taken to-day of that paper. 
I had no idea that the reporters would publish any part of that 
paper. My idea, therefore, would be the correct one — that it 


be referred to a committee, and that they have time to get up an 

The Chairman — I believe the gentlemen of the press are only 
taking extracts from the papers before them. The question is 
upon Mr. Dornin's motion to postpone the matter until next 

Mr. Gunnison — There is another motion to refer it to a com- 
mittee, if Mr. Dornin will withdraw his motion. 

Mr Dornin — I withdraw my motion. 

Mr Gunnison — I then again move that it be referred to a 
committee of three, to be appointed by the Chairman, to draft 
an answer to that paper, and report at the next meeting. 

The motion being seconded by Mr. Wetzlar, was put to a vote- 
and declared carried. 

The Chair — I will appoint as that committee Mr. Dornin, Mr. 
Mullins and Mr. Gunnison. 

Mr. Mullins — I decline the appointment. 

Mr. Dornin — I will have to be excused, for the reason that I 
am on another committee. 

Mr. Gunnison — I did not think, when I made the motion, of 
the rule requiring the chairman to put the mover of a resolution 
on the committee. I would like to be excused. 

The Chair — I do not believe that this paper can be suppressed 
more effectually than in your hands, and I am perfectly willing 
to let it rest where it is. 

Mr. Mullins — The chair knows I have had something to do* 
lately in these matters, and I cannot serve on that committee. 

Mr. Brown — I suggest that the Chair will take time to select 
the committee. 

The Chair— If there is no objection I will take time as sug- 


The meeting then adjourned until to-morrow at 10 o'clock 

A. M. 

Second Day. 

San Fkancisco, Wednesday, February 16, 1887. 
The second day's session of the 11th annual meeting of the 
Fire Underwriters' Association, of the Pacific was opened shortly 
after 10 o'clock this day, with the President, Z. P. Clark, in the 

Mr. Chalmers — I stated yesterday in my paper that Mr. 
Thompson would furnish a paper " on the advantages of the 
bureau system of adjustments." I telegraphed to him the day 
before yesterday to Los Angeles, and I have got an answer this 
morning. He says he has prepared a paper, but washouts pre- 
vented it reaching San Francisco in time. 

The Chair — Mr. Farnfield has a similar telegram from Mr. 
Gurrey, stating that he sent his paper from Los Angeles on Sun- 
day. I have a telegram from Mr. McLellan, saying that he had 
sent his paper yesterday. All delayed by the washouts, I sup- 
pose. These papers can be put in the published records. 

Mr. Chalmers — They may get in, in time to-day. 

The Chair — They may. If so, they will be read. 

I have a letter from Mr. Naunton, the Secretary, saying that 
Tie is not able to be here for he is suffering from a very aristo- 
cratic complaint, the " gout." I would ask Mr. "Wetzlar to act as 

Mr. Wetzlar thereupon assumed the duties of Secretary 
pro tern. 

The Chair — Shall we read the minutes of yesterday's proceed- 
ings or dispense with them ? 

Mr. Chalmers — I move that they may be dispensed with. 


The motion being seconded and put to a vote was declared 

The Chair — I was granted a little time yesterday to select a 
committee to which to refer the paper signed " question," under 
discussion yesterday. This morning I announce as that com- 
mittee, Messrs. D. J. Staples, E. Brown, and E. W. Carpenter. 

If there is no other routine business we will proceed with our 

The Secretary — I do not know of any. 

The Chairman — Mr. Lowden has prepared for us a very inter- 
esting paper on losses and adjustments, with which he will now 
be kind enough to favor us. 

Mr. W. H. Lowden then read the following paper on Losses 
and Adjustments : 


Mr. President and Gentlemen: 

" Losses and adjustments " represent a constant and never ending drain 
upon the resources of an insurance corporation. Their uncertain effect 
upon the yearly statement draws attention to their importance alike from 
the experienced officer in charge of affairs and the shareholder who knows 
nothing of underwriting beyond an expected dividend. What wonder, 
then, that many within this circle become tinctured with a false idea of 
making money out of a claimant by paying as little as seems consistent with 
an elastic conscience. 

' The young man growing up within insurance circles should be differently 
taught. The mind of the beginner in the business must be trained to look 
upon honest losses as demanding honest payment, and to believe that there 
is but one honorable course to pursue in their adjustment, namely, to reach 
an exact result in figures which ",proves " by natural sequence. 

Honesty and exactness should be the governing principles of the young 
adjuster. I speak advisedly, for even the dishonest claim is best contested 
when duplicity is confronted with truth. The temporary advantage gained 
over a dishonest claimant by trickery is soon lost when brought to the test 
in a court of law, while points gained which have truth and equity for a 
basis will come through the fire unharmed. 

It would seem hardly necessary to say a word in defence of exactness in all 
the work of the adjuster; but of late years there has crept into the business 
by degrees a sad lack of this important element. Whether the cause is 


attributable to keen competition for business on the part of managers who 
fear to offend claimants, or to want of knowledge on the part of adjusters, is 
a matter of doubt. At any rate we see from time to time loss papers which 
are anything but 2 r ^oofs of loss. Sometimes it is a compromise without 
apparent foundation; of tener it is an incomplete statement, because the ad- 
juster is satisfied in his own mind that the loss far exceeds the insurance. 

I will admit the necessity of a compromise; but of an incomplete state- 
ment — never. 

It is altogether wrong to send out the young adjuster with the parting 
injunction to " hurry up with the loss, because we know it is largely total, 
and a rough statement will do." The young man will get into the habit of 
making rough statements soon enough; he knows he will get credit for being 
quick, and that he will save much mental labor by taking things "for 
granted." In due time the company will pay totals, when it should have 
salvages or contested claims. 

Exactness^ in the work is preceded by knowledge. Knowledge is popu- 
larly supposed to be best gained by experience. Perhaps this is so; but that 
method of obtaining knowledge in the adjustment of losses is rather expen- 
sive to the companies. It is much better to educate the adjuster before he 
leaves the office. 

The duties of the young special of to-day comprise appointing agents, 
soliciting business, collecting balances, and adjusting losses. He is carefully 
taught how to handle the agents, get business and collect money; but how 
much practical information on the subject of adjustments is imparted to him 
in the office? He is forced to read books he does not understand, soon gets 
tired, and falls back on the hope that experience will perhaps be the best 
teacher after all. 

As I undertand the objects of this Association, one of its principal reasons 
for existence is the education of its younger members, and it is the plain 
duty of a committeeman to keep this object in view. My remarks, there- 
fore, will be addressed to them and confined to losses where books of account 
are necessary to adjustment. When this subject was first suggested to me, 
it seemed of so little moment that I was impatient of the duty I owe the 
Association. The feeling that the older members might consider it a waste 
of valuable time to listen to such thoughts as I might be able to present, 
was very depressing. The young man and his wants occurred to me, how- 
ever, and I now feel that no apology is necessary for what might appear to 
some a paper on elementary subjects. 

Like all matters of mutual interest, this subject grows in importance with 
study, until now I am embarrassed by a feeling of inability to present my 
views to you clearly and forcibly. This was not lessened as my investiga- 
tions continued, for, to my surprise, the subject of book losses appears to be 
the most slighted and the least understood of any part of the business. 

At the very threshhold we are confronted by a careless indifference. No 
fixed rules are found in the text-books — no well defined mode of procedure. 


In them all we find that a'perfect knowledge of bookkeeping is presumed to 
be one of the many qualifications of the young adjuster, and this we all 
well know is not the case. 

As a general thing his knowledge is superficial, and not of such a nature 
as enables him to carefully and intelligently analyze a set of books. Pre- 
suming upon this perfect knowledge, the text-books writers give certain 
definitions, propositions and rules, which are all admittedly excellent, but 
all comparatively useless to him who is not first thoroughly informed on the 
methods employed to reach the results. 

A statement of loss on a stock of merchandise, with its accompanying 
papers, will always, at some point, betray the qualifications, good or bad, of 
the adjuster. No matter how carefully made up or how closely the rules are 
followed, the incompetent bookkeeper will show his lack of ability before he 
gets through. It is of the utmost importance, therefore, that our young 
specials should make up their minds to an exhaustive study of this science 
— they will make money by it, and so will the companies. 

It would be impossible^in the limits of a paper like this to more than touch 
upon a few points which are liable to puzzle the tyro. It is not my intention 
to enter into complicated and difficult adjustments, but confine remarks to 
losses on general stocks of merchandise where value is in excess of say, 
$5,000, and a fairly well kept set of double entry books have been saved 
from the fire. 

The fundamental principle of double entry bookkeeping cannot be better 
explained than by using the homely illustration employed by my old teacher 
twenty years ago. It was simple and effective. He used the simile of a 
pair of beam scales, and extending his hands, balanced them up and down as 
he talked. In one scale you place a 5-pound weight, in the other, five single 
pound weights; your scales balance. Keep adding weights to the scales in 
like manner, still they balance; but drop a one-pound weight in the transfer 
and you are out -you have omitted a debit or a credit. In brief, the founda- 
tion of the science is that every debit entry in the ledger must have one or 
more credits to equal in ths aggregate the amount debited, and vice versa. 

The books in use in a country store necessary to an exact adjustment 
consist of a day-book, cash-book, ledger and invoice-book. The ledger, if 
destroyed, could of course be dispensed with, as its contents could be com- 
piled from the others. Bear with me for a moment while I try to make plain 
to the uninformed member (if such there be), in as few words as possible, the 
method of keeping these books. 

The Day Book should contain a daily record of all purchases and sales of 
merchandise; but, as is often the case, in order to save labor, the purchases 
are omitted, and the invoices themselves are filed in an invoice-book, and 
this is used as a supplementary day-book. 

The Cash Book should contain a daily record of all cash transactions, the 
moneys received appearing at the debit, and those paid out, at the credit of 
the account. 


The postings in the Ledger are made from these books, the items in the 
day-book being sometimes passed through a journal, which is merely a 
stepping stone from one book to the other, and has no value as a record in 
the presence of the day and invoice-books. 

Sales of merchandise made on credit are posted to the debit of the pur- 
chaser and to the credit of merchandise account. Sales for cash generally 
appear at the debit of cash in one sum at the clo-e of each day's transact- 
ions and are thence also passed to the credit of merchandise. Invoices of 
merchandise purchased on time are posted to the credit of the party from 
whom the goods were obtained and to the debit of merchandise account; 
purchases for cash will be found at the credit of cash account and debit of 
merchandise. As a result, we have at the debit of merchandise account on 
the ledger all purchases, and at the credit all sales, whether for cash or credit, 
and if the goods were sold at exact invoice cost, the difference between the 
footings of the two columns would represent exactly the invoice price of the 
stock on hand at any given time. 

Divested of all complications arising from commission accounts and other 
adventures of the assured, we would seem to have, therefore, a simple prob- 
lem to solve, since the merchandise account, when properly kept, shows the 
value of all goods received into and delivered from the store. Whether this 
is easily arrived at or not, depends upon how the work is proceeded with, as 
we shall presently see. 

Different results can be and are obtained by different adjusters from the 
same set of books. In fact, I have known adjusters, single-handed and 
alone, astonish the assured with the variety of the results they could ex- 
tract, when hard pressed. There is, of course, but one result, and 
the method for obtaining it should be carefully studied. The first duty of 
the adjuster when he takes hold of the books, is to see that all unfinished 
work is completed and all the postings made. A trial balance should then 
be taken off in order to prove the correctness of the work and to check any 
fraudulent loading of the debit side of the merchandise account. 

I will not imitate the text books by assuming that the uninformed mem- 
ber knows all about thai balances. The trial balance sheet contains on its 
debit side balances of all accounts on the ledger in which the debit exceeds 
the credit and would include merchandise account; all sums due to the as- 
sured and cash on hand — in a word, his assets and current expenses. The 
credit side contains all ledger balances in which the credit side of the ac- 
count exceeds the debit, and would include capital invested by the firm and 
all liabilities. The footings of these two columns should, of course, agree. 

HaviDg proved the work of the bookkeeper to be ostensibly correct, the 
merchandise account itself has our attention. It becomes necessary to ob- 
. iain a condensed copy of this account, which we may formulate as folio? 





To Stock on hand at last inventory.. $20,000 

•■ Credit Purchases 13,500 

" Cash Purchases 1,500 

By Credit Sales §14,000 

" Cash Sales 2,000 

At its debit we find first value of stock on hand at last inventory, followed 
by all purchases — at its credit, all sales. 

In the ordinary closing of the books at the end of the year, we would 
have an item which is here wanting, viz., an inventory of the stock on hand. 
It is clear that if we had this inventory, and placed the amount at the credit 
of the account, the difference between the footings would show the profit 
(or loss) on merchandise during the period covered by the transactions — a 
profit if the credit side is greater, and a loss, if the debit. 

This inventory being unattainable under the circumstances, our only 
recourse is, if possible, to obtain a correct estimate of the profits for the 
period in question, and, by adding this sum to the debit, we will have as a 
result the value of the stock on hand represented by the difference between 
the two sides of the account. To mike this clear, we will close the account 
in the orJinary way, using the same estimates as before. 




To Stock on hand at last inventory . .$20,000 

" Credit Purchases 13,500 

" Cash Purchases 1,500 

" Profit 3,200 


By Credit Sales 814,000 

'• By Cash Sales 2,000 

" Stock on hand at this date 22,200 


The merchant, knowing the value of his stock, by this means ascertains 
his profit, and, per contra, if we know the profit, we can ascertain the value 
of the stock. In this table we have, also, a graphic illustration of. a fact 
which is sometimes forgotten by the young adjuster (I have argued the 
point with him more than once), namely, the greater the percentage of profit 
allowed, the greater will be the loss on stock. For example, increase the 
$3,200 profit to $4,200, and the estimate of stock on hand will be increased 
an equal amount. 

To estimate correctly the profit on sales and agree with assured on same, 
is perhaps as important a duty as devolves upon the adjuster in a loss of 
this character. If the business has " been in force " for several years, lefer- 
ence to the merchandise account previously closed, will give the actual per- 
centage of profit obtained. I will illustrate this: The account for the pre- 
ceding year shows, let us say, cash and credit sales amounting to $20,000, 
and the profits are shown at $4,000. By deducting the profit from the 
sales, we have $16,000 as the cost of the goods sold. Multiply the $4,000 


by 100 and divide by 16,000 sales, and the profits are shown to have been 25 
per cent. The estimate for the current year would be subject to change 
from reduced or increased competition in that business in the town. 

If there are no past merchandise accounts to figure on, a fairly correct 
estimate can be made by an examination of the invoices and agreement with 
the assured on the profits charged on each class of merchandise. Having 
these figures and quantities, a percentage of profit can be had which will be 
close to the truth. 

Freight. — This is a subject of great apparent trouble to adjusters, and 
the methods adopted to get'it into its proper place, in a statement of loss, 
are as varied as they are amusing. Even a recognized authority like Gris- 
wold says, on page 555 of his Underwriters' Text Book: "There are two 
" distinct methods in use by adjusters for estimating freight and charges 
" upon merchandise in the settlement of losses, producing a marked differ- 
ence in the final results. Adjusters are not [entirely harmonious as to 
<4 w T hich is the more correct and equitable." 

He then proceeds with two examples, showing from the same merchandise 
account a loss in one instance of $8,800, and in the other of $6,240, and 
sums up by gravely informing us that it makes a difference of 82,560 to the 

I cannot understand why there should be any difference of opinion on the 
part of adjusters in this matter. The apparent discrepancy of $2,560 is 
easily explained, and I submit should have been explained by the gentleman 
before he dropped the subject. He has left a stumbling-block for the learner, 
and has thrown an element of doubt into the correctness of every settlement 
of a book lost by this failure. 

Here are his examples: 


Statement of Loss. 

Merchandise per Inventory — Cost $45,000 

Merchandise purchased to date 25,100 

Freight and charges, 4 per cent, on 870,000 2,800 

Total Merchandise S72,80O 

Deductions, viz.: 

Sales to date of fire $27,000 

Less profit 12J per cent 3,000 

Cost of goods sold $24,000 

Merchandise saved, worth 40,000 64.000 

Total loss $ 8,8C0 



Statement of Loss. 

Merchandise per Inventory — Cost . .$45,000 

Merchandise purchased to date 25,000 

Total Merchandise $70,000 

Deductions, viz.: 

Sales to date of fire. $27,000 

Less profit, 12J per cent 3,000 

Cost of goods sold $24,000 

Merchandise saved, worth 40,000 64,000 

$ 6,000 
Add freight at 4 per cent 240 

Total loss $ 6,240 

We will reconcile the two examples, and show that there is in reality no 
difference in the result, provided both methods are correctly applied. 

Presuming that Example No. 1 represents the actual loss, we will make the 
corrections on No. 2. 

EXAMPLE NO. 2.— Corrected. 
Statement of Loss. 

Merchandise per Inventory, at Cost $45,000 00 

Merchandise purchased to date 25,000 00 

Total Merchandise $70,000 00 

Deductions, viz.: 

Sales to date of fire $27,000 00 

Less profit, 12£ per cent 3,000 00 

$24,000 00 
Less 4 per cent, additional 923 08 

Invoice cost of goods sold $23,076 92 

Merchandise saved, worth. .$40,000 00 
Less 4 per cent 1,538 46 

Invoice cost of goods saved $38,461 54 $61,538 46 

Invoice price of goods destroyed $ 8,461 54 

Add freight at 4 per cent 338 46 

Total loss $ 8,800 00 

It will be noticed in both examples Mr. Griswold makes the profit 12% 
per cent., ignoring the fact that in Example No. 1, the profit allowed is sup- 
posed to be over "cost and freight," while in No. 2 it is over invoice cost, 


only. His figures of $24,000, representing the cost and freight in Example 
1, must, therefore, in Example 2, be reduced 4 per cent, additional to bring 
the amount down to the basis on which this latter statement is made, viz. : 
invoice price. 

So, also, with merchandise saved, worth, in the first example $40,000; 
cost and freight we reduce in the correction, by deducting freight, and 
make the invoice price of this item $38,461.54 only. These corrections, 
(after the proper addition for freight on goods destroyed) make the loss in 
both examples exactly the same. 

I am afraid this matter of correctly allowing freight is rather a hazy sub- 
ject to more than one Pacific Coast adjuster. A case in point came under 
my notice recently. The papers were from the hands of an experienced 
adjuster, and one who would have a strong claim upon the confidence of any 
company represented here. The statement showed the inventory; goods 
purchased, sold, saved and lost, all right and proper at net invoice price, 
but flushed up with an addition for freight on the entire inventory and goods 

As between the two methods of including freight, I incline strongly to that 
which adds the proper percentage to the goods injured by the fire. This 
plan relieves the loss statement from any complicatons caused by including 
it at an earlier stage of the adjustment, and as we have seen, the result is 
the same to both the assured and the company. 

Inventory — This should undergo a very critical examination previous to 
its apperance at the head of the loss statement. If stock has been taken at 
"cost and freight," which is sometimes done, more especially at points situ- 
ate at a great distance from commercial centers — the proper deduction should 
be made to reduce figures to net cost. 

This percentage of freight is easily arrived at by ascertaining the amount 
paid for, say, a year past, and dividing this by the purchases for the same 

Other deductions will often be found necessary. Store fixtures, furniture 
and safe — horses, wagons and harness; and sometimes even the store build- 
ing itself will be found included in the inventory. Merchandise not cov- 
ered by the terms of the policy should also be noted and deducted. This 
leaves us a clean start with goods on hand at invoice price. 

Purchases— Since date of inventory, and charged to merchandise account, 
should be relieved of all items not covered by the policy, and of goods held 
on commission. Invoices of goods in transit sometimes get into the mer- 
chandise account before the goods get into the store. They should be taken 

Among the purchases will at times be found charged the premiums paid 
for insurance on stock and building, as in the estimation of some merchauts 
this is an item which properly increases the cost of the goods, and should 


be so treated. Traveling expenses will also be found at the debit of mer- 
chandise account in some instances. It is not necessary to say that both 
these items should be deducted from purchases. They do not form a part 
of the invoice price of the merchandise, any more than does the salary of 
the porter or the rent of the building. 

Depreciation — The inventory last taken, will in a few instances be found 
depreciated on the books, but oftener the merchant is willing that his assets 
should appear as great as possible, and charges his merchandise account 
with the actual cost of the stock on hand, making no allowance for shop- 
worn or unsalable goods. 

This matter of depreciation is a most important one. The percentage to 
be deducted should be agreed upon with the assured (and reduced to writ- 
ing) before the figures of stock on hand are ascertained. This remark ap- 
plies equally to discounts for time purchases and percentages of profit. 
The reason must be apparent. If the assured finds that these figures of de- 
preciation, discount and profit are liable to reduce the amount of his loss 
below the face of his policy, the difficulty of agreeing with him will be 
very much increased. 

It is no part of my plan to give any estimates of the proper amount 
chargeable to depreciation, but simply to submit a few suggestions which 
should be considered when figures are being agreed upon. If the inventory 
is found to have been depreciated, the allowance on subsequent purchases 
would, of course, be small; but if the business has been conducted for a 
number of years, and the inventory always made at full cost price, figures 
should be aqjepted only after careful investigation into the character of the 
stock This latter condition of the inventory has a bearing also on the 
profits, the percentage of which will be found to decrease from year to year, 
in consequence of the fact that the old goods are being sold at reduction. 
The agreed profits on the current year's business would therefore be affected 
in favor of the company. 

Depreciation is sometimes figured on the cost of goods after freight has 
been added. Apart from the difficulty of convincing the assured of the 
equity of deducting anything from freight actually paid by him, it will be 
found much easier and more business-like to agree on a percentage which 
has for a basis the actual invoice price of the merchandise. These matters 
being given full weight, it is plain that only the invoice price of the stock 
injured by fire should suffer xlepreciation. 

Discount for Time Purchases — There is much uncertainty and confusion 
on this subject in the various forms given in the text books; the purchases, 
and even the inventory itself, being sometimes subjected to a deduction 
on this account; this is altogether wrong; the invoice price of the stock in- 
jured by fire should alone be made to suffer discount. 

Let me illustrate — The merchant purchasing goods on long credit, pays 
more for them than he who pays cash. They are invoiced to him and 


appear on his books at this increased cost. He has sold part of them at a 
certain profit over the invoice price, and we have agreed with him on this 
percentage of profit in order to ascertain — what ? Simply the invoice price 
(to him) of the goods he had on hand after the transactions of a series of 
years, which had for their close the destruction of these goods by fire. 
Having obtained this invoice price, it only remains to show the difference 
between it and the actual cash price. The fact that the assured has been 
paying more for his goods than his neighbor who pays cash, results only in 
reducing his percentage of profit, and does not at all affect the volume on 
hand, provided the percentage of profit is properly influenced thereby. 

A fair estimate of the amount to be deducted in order to reduce the stock 
to a cash basis, can be arrived at by examination of the invoice book and 
noting what proportion of the purchases are "time." and the average length 
of the credit received. 

Goons Used by Family of Assured— This is sometimes an important 
item, and is always worthy the attention of the adjuster. If charged at all 
on the books, they will be found at the credit of merchandise account and 
at cost price. If allowed to remain there and be included in the item of 
merchandise sold, the final result will be greater than the truth, by just the 
amount of current profit on these goods. They should be deducted from 
sales until after the profits are figured, and then appear as a separate deduc- 
tion from stock on haod. 

If these items are not found on the books, it will have to be a matter of 
agreement with the assured as to the amount. Horses are sometimes fed 
with '-feed" taken from the store, which has originally appeared at the 
debit of merchandise, but for which no corresponding credit lias been given. 
This should properly reduce the stock on hand. 

Merchandise Saved Uninjured— Should be separately scheduled at in- 
voice price, and this sum forms the first proper deduction from stock on 
hand at time of fire. 

Damaged Stock should be appraised at its actual cash value on the ground. 
The method of assessing damages at a certain figure is a poor one, as it in- 
volves the necessity of acquainting the appraisers with the cash cost and 
freight of the articles, and deducting the damages therefrom to ascertain the 
present value. The present value of the damaged stock is all that is required 
in the first place. 

I submit a forrn, of " Statement of Loss," embracing the suggestions made, 
which differs from the usual form in several respects, but principally in that 
the invoice price of the stock injured by fire, and not the " stock on hand,' 5 
is made the proper subject for deductions and additions. The invoice p 
of the stock injured is the item of interest to the company, and this alone, 
as I have endeavored to prove, should be depreciated or appreciated, as the 
circumstances require. 

(Note. — The following sta'.ement is purposely redundant; the words in 


italics can be dispensed with in practice, and still leave the methods em- 
ployed sufficiently clear. They are inserted only for the benefit of the 


Amount of Inventory, taken January 2, 1886, at cost and freight. .$20,000 00> 
Less value of store fixtures and furniture included in 

Inventory $1,100 00 

Less a Iso freight on balance ($18,900 00) included in 

Inventory — ascertained rate at 5 per cent 900 00 2,000 00 s 

Leaving actual invoice price of Inventory $18,000 00 

Add cash and credit purchases at invoice price 15,000 00 

Invoice price of merchandise to be accounted for $33,000 0O> 

Deductions, to ascertain invoice price of stock injured. 
Total cash and credit sales, asper books. $16,S00 00 
Less agreed profits over invoice cost @ 

20 per cent 2,800 00 

Leaving invoice price of sales to date of fire $14,000 00 

Mdse saved unharmed, at actual invoice price 3,000 00 

Mdse used by assured at invoice price (during b% 

months, at $100 per month) 550 00 17,550 0O 

Giving as a result the invoice price of stock injured [either totally 

destroyed or damaged) by tire $15,450 00 

Further Deductions and Additions, to ascertain actual value. 

Depreciation on $15,450 00 @ 10 per cent $1,545 00 

Discount for time purchases on $13,905 00 (nine- 
tenths of the goods having been bought on time) 
@ 2 per cent 278 10 

Actual appraised (or agreed) cash \alue of the dam- 
aged merchandise , 1,125 00 2,918 ia 

Which gives the loss on mdse. at invoice price, less the agreed de- 
ductions for depreciation and credit purchases $12,501 9Q 

To this add freight on $15,450 00 (the stock injured by fire) @ 5 

per cent 772 50 

And the loss to the assured, on a cash basis, is $13,274 40* 

In conclusion, permit me to warn managers against the growing custom 
of placing book losses in the hands of inexperienced young men. It is alii 
very well to say that the young man must learn sometime, but it is also im- 


portant that the companies should not pay too dearly for his education. 
That they are doing this every day, I have not the slightest doubt. 

The remedy is a simple one, namely, to see to it that the young man is 
■ able to undergo a critical examination in double entry bookkeeping before 
.he is intrusted with the adjustment of such Josses. 

To the young man himself permit me a word. Knowledge is easily ac- 
quired in these days; it costs little more than the time spent in obtaining it. 
How much of your time on the road is wasted that could be profitably spent 
in the study of a business which requires a lifetime to master? 

Do not think that reputation for ability will come without labor, or that 
xeward will precede merit. 


Mr. Chalmers — We have just listened to 'a paper containing 
most valuable information as well for the old as the young mem- 
bers of this association, and I sincerely trust that all the tables 
of Mr. Lowden's paper be preserved in the review of the annual 
proceedings. In fact, not only so preserved, but also that they 
should be published in phamphlet form, so that the young 
adjusters can take it along with them in their grip-sack, when 
they go out on adjusting tours. 

The President — I would suggest that Mr. Chalmers put his 
remarks in the form of a motion. 

Mr. Chalmers — I move that this last paper be published in 
pamphlet form. 

Mr. Mitchell — As one of the young men in the business I must 
confess that I think this is one of the most valuable papers that 
has as yet been read before the association, and I, personally, 
feel deeply obligated to Mr. Lowden for such excellent and 
wholesome advice. When the article is in pamphlet form I 
certainly shall procure a copy and keep it in my grip-sack where 

I can readily and frequently use it. I second the motion. 


Mr. Edwards — I think, notwithstanding I have been in this 
business for the past sixteen or seventeen years, and can hard- 
ly be called a young member, still, I frankly admit that I can 
<3ull many expressions of good sound advice and wisdom from 
Mr. Lowden's paper, and I would like to see it printed, not only 


for the young members but as well for the older ones. I want 
it myself. 

Mr. Watt — I wish to express my thanks to Mr. Lowdem 
for his very valuable production. 

Motion unanimously carried. 

The President — We shall now be pleased to hear from Mr. A.. 
K. Gunnison, Mr. Ferry being absent. 

Mr. Gunnison — Mr. President and members of the association r 
I can't say, as several of my predecessors have said, that ten 
days is hardly sufficient time to prepare a paper to be read before 
this association. 

Twelve or fifteen days ago I met your President upon the- 
street with a very long face — nearly as long as your arm — and 
he said that possibly some of the papers he was expecting from 
the east would not arrive in time, and that he felt that he was 
compelled to call upon some of the members to supply the defi- 
ciency, and asked me if I, for one, would help him out. 

In pity for our President I jumped before I looked, and said 
that I would. He asked me what I would choose for my sub- 
ject, and I told him unhesitatingly, "Ancient and modern pol- 
icy conditions." However, procrastination — that villainous lit- 
tle thief of time — with a press of business found me yesterday 
totally unprepared to answer to the call of my name for my 
address. What I have now was written since yesterday morn- 
ing ; and, while it shows that ten days is not absolutely neces- 
sary in which to prepare a paper to be read before this associa- 
tion, yet it does prove that two days is totally inadequate in. 
which to prepare one that does the subject justice, or a paper 
that is worth reading. 

It seems to be my part perhaps to furnish the shells of the- 
nuts while you are digesting the meat that has already been fur- 
nished you, and perhaps you will in consequence of that fact, all 
the more appreciate the digesting of the meat that has already^ 
been furnished you by other eloquent and wise members of 
the association. 

I will read this paper of mine in the form of a letter addressed 


to Major Z. P. Clark, President of the Underwriters' Association 
of the Pacific coast : 


Mr. President: 

You have very kindly asked rne to contribute something for the annual 
meeting of the Association. I feel highly honored by the invitation, and 
shall feel myself doubly honored if I should be so fortunate as to succeed in 
gaining the attention of the members here assembled while I try, in my 
liumble way, to draw a comparison or two between the conditions of fire 
policies of the olden time and the forms now in use, and attempt to give a 
reason for the wide difference so plainly to be seen; my object being mainly 
to induce thought in others rather than to give argument. In order to 
make the contrast more fully apparent, I will take, for an example, two forms 
of policies, the first issued in 1794, and the other, the form lately adopted 
7)j the underwriters of New York, and called the "Standard Form." I 
presume most of the members of this association have made themselves 
familiar with the latter. 

The first form, referred to above, was issued in Hartford, Conn., and is a 
facsimile copy of the second policy issued by the Hartford Insurance Com- 
pany. The whole printed portion of the policy does not take up as much 
space as some one or two of the several dozen of conditions in the standard 
form. The first contains about twenty-five lines, and the latter one hundred 
and twelve lines, and over one hundred conditions and sub-clauses. The 
form of 1794 simply recites as follows: 

Whereas, (name of assured) or whom else it may concern, wholly or partly, friend 
■or foe, doth make assurance on his house against fire, and all dangers of fire; moreover 
against all damage which on account of fire may happen, either by tempest, fire, wind, 
own fire, negligence and fault of own servants, or of neighbors, whether those nearest 
or furthest off; all external accidents and misfortunes; thought of and not thought of, in 
what manner soever the damage by fire might happen; valuing specially and voluntarily 
the said house at the sum insured. And the assured, or whom it may concern, in 
case of damage, or hurt; shall need to give no proof nor account of the value; but 
the producing this policy shall suffice. And in case it should happen that the said 
tiouse, the whole or part, are burnt and suffer damage, on that account, we do hereby 
promise punctually to pay and ratify, within the space of three months after the fire 
shall have happened, due notice having been given to us, and no deduction to be made 
from the sum assured except two and an half per cent, provided said loss amounts to 
iive per cent, under which no loss or damage will be paid. And in case of a partial loss, 
all that shall be found to be saved and preserved, shall be deducted, after the deduc- 
tion of the charges paid for the saving and preserving; and concerning which the assured 
shall be believed on his oath, without our alleging anything against it. And so we the 
assurers are contented, and bind ourselves and goods present and to come, renouncing 
all cavils and exceptions contrary to these presents, for the true performance of the 
premises, the consideration due unto us for this assurance by the assured, at and after 
the rate of one-half per cent. 

Reciprocally submitting all differences to two persons, one to be chosen by the as- 


sured out of three to be named by the assurer, the other by the assurer or assurers, out 
•of three to be named by the assured, who shall have full power to adjust the same; 
but in case they cannot agree, then such two persons shall choose a third, and any two 
of them agreeing, shall be obligatory to both parties. 

I have given here the whole of the printed form. The written portion is 
very brief, being confined simply to date, rate, name and signatures, and 
■describing the insured property only as a "dwelling house." It does not 
state how many stories in height, whether wood or brick, or where located, 
except that it was in Hartford. It is presumed that the insured had but 
one house in Hartford, since, had it been otherwise, in case of a fire, this 
policy could have been floated around to cover any house, wherever situated 
in that town, belonging to the party insured. 

It is not the object or province of this paper to discuss the merits or demer- 
its of any condition, either ancient or modern. Mr. Faymonville has dis- 
cussed the latter proposition very ably, yet I cannot refrain from noticing 
one clause of the above form which you do not find in those of the present 
day, to-wit, it appears to value the property at the amount of insurance, 
asking no account of value from the owner. This is a feature that all good 
underwriters of the present day feel obliged to avoid. Notwithstanding this 
the wise men of our Legislature and of many others are trying hard to re- 
turn it practically to use, by attempting to piss the so-called "valued policy 
law," a law generally advocated the warmest by those who know the least 
about tire insurance business, or by enemies and members of the Third 
Hou-e. That clause was soon dropped out when it was found by experi- 
ence that the insured could and did make money and defraud the insurers by 
firing his own premises, and is now strongly opposed on the ground that 
such a clause or law would in effect offer a premium for arson. Upon the 
-good Christian doctrine that we should not lead our fellow men into tempt- 
ation, all good underwriters make it their constant and p rsistent effort, as 
well by their own acts as by frequent instructions to their agents, to pre- 
vent over-insurance. In spite of all this, ignorance or intentional fraud 
upon the part of the insured, incapacity of judgment or collusion upon the 
part of agents (the latter very seldom), results in disaster. It would look 
as if this form was used by our underwriting forefathers in a blind belief 
that all men were honest, but was dropped when it was found that poor 
human nature could not be trusted under so great a temptation. In this 
practical, money-making year of 1887 it is very amusing, and almost absurd, 
to note how much confidence our predecessors in underwriting reposed in 
their customers. What would be thought of an underwriter to-day bind- 
ing himself to pay the whole face of the policy, asking no account or proof 
■of value, the producing of the policy being sufficient? Also, in the case of 
partial damage, the value of saved portions to be taken from the face of 
the policy, together with the expense for saving and preserving, and the 
balance of the policy to be paid without question, "and concerning which 
the assured shall be believed upon his oath, without our alleging anything 
against it? " Where would an insurance company bring up, in these days, 


with such a contract? I think I hear all the adjusters here and elsewhere 
shouting with one voice, " Where— oh, where!" Such a company would 
do a big business the first year, with a reasonably small amount of losses; 
a larger business the second year, with a very much larger amount of losses; 
and, at the end of the third year, its losses would far exceed its income. 
After that it would run rapidly to the end, which would not be far off. 

Our predecessors took ninety days to pay the loss. At the present time 
the insured grumbles if not paid immediately on presentation of proofs; in 
fact, most of them desire the money first and make the proofs afterward. 

And how about the New York form? We will notice a few of its many 
provisions. It provides for paying only cash value, found necessary to 
prevent paying claims at cost value where depreciation had occurred previ- 
ous to the fire, which is only another manner of getting " over-insutance,' , 
including all its consequent fraud and temptation to do evil. It promises to 
pay in sixty days, instead of ninety, ? and makes it optional with the company 
to take the damaged property at its appraised value. Nearly forty lines- 
are devoted to certain reasons, naming some two dozen, whyfore and in 
what cases the policy shall become void. It is needless to repeat them 
here, but each and every one have been found a necessity to prevent and 
protect against fraud, and guard against quibbles of unjust laws and ad- 
verse legislation. 

Wherefore are all these protective conditions required that have ere ft 
into our policy forms? Are we prepared to say the moral sense of the 
great body politic has fallen so low that it is necessary to hedge our busi- 
ness transactions around with protective conditions to guard against fraud? 1 
That the sense of honor in many points has suffered many a blow, from 
self-interest and an over-desire to make gain, by sharp practices, that has 
sadly blunted its fine edge, is quite apparent; but I do not believe that 
we are, as a whole, less honest than our ancestors. We do not trust enough 
to the honor of our fellows, but trust to courts to decide for us, when 
Justice, being blindfolded, is hoodwinked and cheated by tricks and illegal 
subterfuges. Many people seem to think that success is right, no matter 
what the means. Hence self-protection, being "the first law of nature,'' 
has been appealed to. Were there no crimes against society and individual 
peace and personal safety, there would be no necessity for protective laws 
and penalties for disobedience. So also with insurance policies: while no 
attempts to defraud were made, no protective conditions were necessary. 
Each condition added since 1794 has been forced upon the underwriters, 
much against their wishes and desires. Nearly one hundred years of expe- 
rience has taught underwriters that he who takes care of his business by a 
well drawn -up contract has a level if not a long head, and, while protect- 
ing himself, furnishes better indemnity to his customers. 

Skipping over several conditions in the new form, any dne of which 
would furnish a theme for profitable discussion, we come to thirty lines 
stating how the proof of loss shall be made, and defining the procedure in 
case of loss. And here is where a marked difference comes in between the 


old and the new. The old form of policy says, no proofs shall be required, 
etc. — the oath of the insured shall be sufficient. The new form takes many 
long lines, stating what must be done to prove that a loss has occurred, and 
the manner of making claim for the damages. Who will dare to say that 
all this work and trouble is the simple invention of the underwriters, without 
good and sufficient cause? No one here present, I dare say! Experience has 
taught us that d shonest men will take advantage of every thing " thought 
of and not thought of." 

Thus we see that the oft-repeated assertion of ignorant men — ignorant of 
the principles that underlie good underwriting — that " the policy contains- 
so many conditions that insurance does not insure," is easily answered. 
Gladly would the underwriters go back' to the old form, with no condition 
but the plain contract to pay the loss, ''renouncing all cavils and exceptions, 
protected only by wise statutes against fraud. Could the insured be trust- 
ed, firstly — to never set fire to 4 his property for the purpose of defrauding the 
underwriters; secondly — always to give, honestly and squarely, his exact 
loss u to the best of his knowledge and belief," the fire insurance companies 
would hail the fact with acclamation, and cancel every condition in the 
policy blanks. Then adjusters, those awfully naughty men, would be dis- 
missed from service, adjusting of losses would cease to be a profession, and 
the milleneum in insurance business would dawn upon a long-suffering 

I do not think the present age less trustworthy in business relations than 
the moie ancient. Some men pretend to think the world is growing worse 
every day, in a moral sense. I do not believe it! If simply the proportion 
of bad to good has been kept up, the very enormous increase of popu- 
lation since 1794 would make the bad appear more numerous; we meet them 
oftener, that is all. But we do not notice that we meet, also, more and 
more of the good and honorable. So in our insurance experience; if we find, 
oftener than years ago, those who are studying how to defraud and cheit, 
happily, we also rind more men who are honest and square in their deal- 
ings, and these almost make us ashamed of the weaker side of human 
nature that forces us to build such a Chinese Wall of conditions between 
us and fraud. 

How pleasant it is to the adjuster, 

Who has traveled fast, and traveled faster, 

Braving stage and rail disaster — 

Through heat and cold or siormy blast, or 

Rain, or dust, to find at last a — 

Whole-souled, honest claimant to deal with; who states only the truth* 
whose loss settles itself; who can be believe! on his oath, and nothing can 
be alleged against it! And, thanks to the better side of human nature, we 
often find such men. 

And so, repeating the adjusters' oft-repeated truism "that conditions 
in policies are not intended as protective against honest men, and no honest 


man needs fear them," I bow myself out and leave this desk to be occu- 
pied, to-day, by men better calculated to instruct and amuse you. 


The Chair — I have some telegrams here which I will hand to 
the Secretary to read. 

New York, February 15, 1887. 
Z. P. Clark, Preset Underwriters' Ass'n, 210 Sansome St , S. F.: 

Compliments to the members, and wish I could meet with you to-day. 


Bed Bluff, Cal., February 15, 1887. 
Z. P. Clark, Underwriters' Association, S. F.: 

Kinne couldn't pack it; find paper on his desk to-morrow morning. Ask 
Naunton to read it; he has no family. I will plant roses on his grave. 

Bruce B. Lee. 

Imperial Palace, Moscow, February, 1887. 
Z. P. Clark, Esq., Pres't Fire Underwriters' Ass'n, San Francesco: 

I see from cablegrams that you use my name in your Address. Your case 
is harder than mine. Turn the rascals out. Alexander. 

Denver, February 16, 1887. 
Z. P. Clark, Pres't Fire Underwriter's Ass'n, San Francisco: 

Have your marines fix a rate on my "high C." Guille. 

Assembly Chamber, Sacramento, 16th February, 1887. 
Z P. Curk, Esq., Pres't Fire Underwriters' Ass'n, Snn Francisco: 
Say to your Dinner Committee, save fourteen seats for us to-night, 


Senate Chamber, Sacto., February 16, 1887. 
Z. P. Clark, Prest, &c, S. F.: 
It is cold here. Burns. 

The Chair — The next paper on our programme is one on Leg- 
islation and Taxation, by Mr. L. B. Edwards. 

Mr. L. B. Edwards then read the following paper: 

Mr. President and Gentlemen of the 

Fire Underwriters' Association of the Pacific: 
Two years ago I read a paper before this Association upon the subject of 
legislation and Taxation. On that occasion I racked my brain for original 
thoughts, and I presume you, Mr. President, considered the paper a failure, 


took pity upon me, and thought to do me a kindness by permitting me to 
write another on the same subject, hoping that I might redeem my reputa- 
tion. I can conceive of no other reason why I am before you to-day. This 
time I will not disappoint him by attempting to give any original ideas, 
but will content myself, and hope to please him, and you too, gentlemen, 
by giving a few echoes from papers heretofore read by the members of this 
and other associations. As I find that Legislation and Taxation have been 
talked about until there is nothing new or original under the sun to be said 
upon the subject — a nosegay of culled flowers I bring, with nothing my own 
except the thing that binds them. 

The first paper read before this Association on the subject was at the first 
annual meeting, held February 20th, 1877. On that occasion Mr. Edward 
Brown read a paper, very short, and the pith of which was as follows: 

As a rule, the State Senators and Representatives, being very rarely chosen from the 
business ranks of the community, bring to bear on questions brought before them re- 
lating to insurance a wonderfully dense and profound ignorance of the real intention 
and mission of insurance corporations, and too frequently look upon the capital and 
accumulation of such corporations as their natural prey. 

Further on, he says, referring to the burdensome taxes imposed upon in- 
surance companies by some of the States, "Happily the legislators of Califor- 
nia are wiser than their brethren of other States, or else not being pos- 
sessed of equal financial ability have not burdened the business of insur- 
ance with such onerous taxes." We presume, however, that friend Brown, 
at this date, has very much changed his mind relative to the wisdom and 
financial ability of the recent members of our California Legislature. 

At the third annual meeting of this Association, your committee accom- 
plished more than has be^n done by all of the committees on legislation 
and taxation prior to or since that date. They drafted an ordinance creating 
the position of Fire Warden for cities and towns. This report was signed 
by no less distinguished gentlemen than J. F. Houghton, D. J. Staples and 
C. Thomas Hopkins. Whether this ordinance was ever adopted by any city 
or town I know not. 

During the second and fourth annual meeting of this Association we had 
no paper or report from the members of the Committee on Legislation and 
Taxation, which I consider fortunate. 

At the fifth annual meeting, in a letter of apology signed by Mr. W. J. 
Callingham, Chairman of the committee, we find the following: "The sub- 
committee of the legislative committee, consisting of Messrs. Dornin and 
Bromwell, made very able arguments before the committees on corporations 
of both houses, which I am sure will have great weight when the bills come 
up for passage." This report, if we will permit our minds to run back to 
that date, is likely to bring a smile to the countenances of the older mem- 
bers of this Association, for those were lively times in insurance legis- 
lation in California. 

The most lengthy report on this subject was read by Mr. A. D. Smith at 
our sixth annual meeting. He begins by saying: 


With the premise (in which we have no doubt you will all agree with us) that of 
legislation, as it goes, the less we have of it the better, your committee congratulate 
you upon the fact that this is an off year with our Legislature. We are not, as mem- 
ber of sub-committees, compelled to seize our traveling bags and run to the Sacramento 
boat, because our colleague at the front telegraphs us that the member from Milpitaa is 
weak and wavering, and needs our peculiar method of manipulation to bolster him up. 

As a cause for much of the legislation adverse to our interest, Mr. Smith 
very pertinently puts the question: 

Has not a spirit of selfishness caused us to forget the golden rule, and seek the ad- 
vancement of our own personal interest while disregarding those of our neighbors? In 
this lack of unity, engendered in selfishness, lies our weakness. Our enemies, know- 
ing this, toss into our ranks the apple of discord and look smilingly on whilst we tear 
each other to pieces, and then come in and seize and divide the spoils among them- 

As a remedy, Mr. Smith says: 

While thus having dealt in generalities, your committee have a few practical sugges- 
tions to offer. To aid us in laying this spirit of selfishness we must secure such legisla- 
tion as will place us on a common basis. If the local companies are subjected to taxes 
that are not imposed upon eastern or foreign companies, so modify our laws that the 
burden may be the same on all. A moderate, uniform tax upon the net premium receipts 
would accomplish this, and if every State should enact an income tax, every company 
would piy its just proportion of the several State government expenses, and no more. 

Mr. Smith concludes his very able paper with this happy reflection, "And 
when all the States have such uniform laws upon their statute books, then 
the millenium will be at hand and w r e can all dwell together like brethren 
in unity.''" 

The next paper read before the Association was by Mr. T. A. Mitchell, at 
our seventh annual meeting. Mr. Mitchell puts the case of legislation very 
tersely by saying: 

The honest property holder does not ask for the passage of any such absurdities as 
are before the legislatures of our own and several other States at the present time. 
The policy contract of to-day gives him indemnity, which is all he wants, and all he 
pays for; he is satisfied that in cases of loss his claim, if just, will be met honorably, 
and he bases his opinion on the honorable record of the company that protects him, the 
same as he does on that of the banker or the merchant with whom he deals. Politicians 
and their friends (call them the lobby, if you choose) are fully aware of the dangers the 
underwriter apprehends when the Legislature meets, and they always make the best of 
such knowledge; for we soon hear of deposit bills, tax bills, and that king of horrors, 
the valued policy bill, all beiDg introduced (by request); and in this way are insur- 
ance companies made the special target of the friends of legislators. It would almost 
seem incredible that such attempts should be made to damage, if not destroy, a busi- 
ness of such magnitude and importance. 

Mr. Mitchell does not agree with Mr. Smith on the subject of taxing pre- 
miums. He says: 

We are opposed to a tax on premiums. It simply means that the property owner who 
wishes to protect himself against loss has to pay a State tax for the privilege of doii 
for if he does not pay it directly, he has to pay it in the shape of increased rate." 


At our eighth annual meeting, I, as Chairman of the Commitee on Legisla- 
tion and Taxation, read a paper, made up of " original thoughts;" and 
after a careful perusal of the same, I find nothing worthy of reproduction in 
this paper. 

At our ninth annual meeting, in the paper read by Mr. J. F. Houghton, 
Chairman of this Committee, he gave us a remedy for the evils arising from 
State supervision of insurance, the following: 

Your committee are of the opiDion that the radical cure for all this annoyance and hin- 
drance to the legitmate business is National legislation. We believe that the Congress 
of the United States should, in concise and forcible language, declare to the people the 
principles upon which this great interest is founded, and establish rules, regulations 
and conditions, upon compliance with which any corporation organized in any State for 
that purpose may, so long as solvent, do business in any State of the Union, and be at 
once relieved of the great variety of requirements which the irregular enactments of the 
several States impose, and of all the objections which the ingenuity of an Insurance 
Commissioner can invent. 

Commenting upon Mr. Houghton's remedy, Mr. Carpenter said: "I rather 
doubt whether Congress could pass a law providing that an insurance com- 
pany might do business in all the States, in opposition to the laws of those 
States, should they choose to pass it. 

At the tenth annual meeting, both Mr. Smith and Mr. Mitchell again 
found themselves members of this committee, and called upon to write some- 
thing on the subject. Mr. Smith, again full of self-condemnation, said: 
"The cause of our trouble lies all within ourselves. We alone are at fault. 
Selfishness is the rock whereon we meet with our discomfitures. Each of us 
is striving to obtain some advantage at the expense of our neighbors." Mr. 
Smith does not tell us that we are any nearer the millenium than we were 
when he read his paper two years before. 

Mr. Mitchell in his second paper gives us solid chunks of advice. The 
entire paper is worthy to be repeated here, but space and your patience 
forbid. We quote: 

Gentlemen, argument is now out of question — it is needless; the future safety of 
our business lies in prompt and decided action. One grand united action on our part 
to make the policyholder understand that any additional taxation, or increase of fire 
hazard, by any legislation, must come out of his individual pocket, is worth more in 
defeating obnoxious legislation and taxation than all arguments the ablest Committee 
of Underwriters can produce. 

He then gives us the example of the ten per cent, tax which was added to 
the tariff rate in Sonoma county, and the five per cent, in the State of 
Nevada by the Pacific Insurance Union, and the action of the companies 
in withdrawing from Idaho and New Hampshire when the valued-policy 
law went into force in those divisions of our country. 

Mr. President: When I permit my mind to wander back over the eleven 
years of our existence and see, in the bright visions of my fancy, how your 
eleven committees on legislation and taxation have labored and racked 
their brains, burning the midnight gas, to lay before us, and through us 


the dear people — and particularly our able and honest legislators — the many 
and ponderous reasons why we should be permitted to ply our vocation 
in peace; and then when I turn from that vision, and cast my eyes toward 
the government seat of our Golden State, and contemplate the effect that 
all this labor, all this destruction of gas and all this racking of brain has 
had upon our representatives who are now assembled there, the hand with 
which I write ceases to perform its functions; my pencil falls upon the 
table; the paper upon which I write rolls up in seeming disgust, and I fall 
back in my seat, and the heart within me cries out: 'tis enough, 'tis enough! 
give me repose. 

I presume you are all saying within yourselves that this is a good place to 
stop; but fearing that I may not have another opportunity to give you a dis- 
sertation on the subject of Legislation and Taxation, I shall continue, and 
try and awaken a few echoes from our afflicted friends in the East, and quote 
first from the address of Mr. A. W. Spaulding, the President of the Fire 
Underwriters' Association of the Northwest, at their eleventh annual meet- 
ing in 1880. He says: 

Without intending to be personal or offensively critical, I believe these valued-policy 
laws are largely traceable to those companies doing a large farm business upon a system 
which results in over-insurance in practice, if not in theory. When fires occur, it is 
found that the policy contains a two-thirds or three-fourths loss clause which, with the 
over-insurance, produces a salvage, making the adjustment odious throughout large 
farming districts. This antagonism is generally manifested in succeeding legislatures 
by representatives of agricultural constituencies, and the ninety and nine companies 
which have given no offense are punished for the acts of one only. 

There are so many good things in the annual proceedings of the Northwest 
Association to quote from that it is difficult to make selections. The be«?t, 
however, tbat I find is a quotation from a message of the Governor of Kansas 
to the Legislature of that State. He says: 

The State certificate of solvency has proved in the past no security for insurers; and 
the real security lies, not in the Insurance Department, but in the law which shall 
prevent any company from paying over 75 per cent, of any proved loss, and thus dimin- 
ish the present premium on incendiarism. And I therefore urge upon you the wisdom 
of a law which shall compel every fire insurance company doing business in this State 
to make it a plain contract provision of every policy that no more than 75 per cent, of the 
proved loss of property under it shall be paid, and denouncing heavy penalties aud for- 
feiture of the right to do business within the State against any and every company issu- 
ing policies without this provision, or settling losses on any other basis. 

I will not attempt to tax your patience further, and will close this paper 
by quoting from the address of Mr. Cyrus K. Drew, President of the North- 
west Association, at its fifteenth annual meeting: 

Much has been written about the hostile Legislatures. Some of them treat insurance 
companies as public enemies. Life is too ?hort to attempt the education of the hay- 
seed legislator, who, fresh from his rural constituency, seeks political immortality by 
attacking monopolies. These, to his fevered imagination, consist of insurance and rail- 
road companies. The latter generally manage to subdue opposition by a generous dis- 


tribution of passes. The average legislator, with an annual pass in his pocket over every 
railway in the State, becomes at once oblivious to the extortions to which he had called 
attention in stentorian voice, from every hustings. So far the railroad companies have 
the advantage of us, but the insurance companies have the matter of rates in their 
own hands, and should advance them to meet the unwarranted exactions of State 
Legislatures. If these choose to levy tribute upon insurance companies for doing busi- 
ness in their respective States, let the tax be upon the citizens thereof, with a hand- 
some margin for expenses and contingencies. Instead of spending breath or money in 
fruitless attempt to educate these half-baked legislators, let us permit them to work 
their own sweet wills, leaving their dear constituents to foot the bills. This would be 
poetic justice allied to common sense. 


The Chair — I notice that the Governor of Wisconsin has made 
the same recommendation, limiting the company's liability to 
66f per cent, of the value of the property destroyed. 

Mr. Chalmers — And balance for the school fund ? 

The Chair — Or for the fire department. 

Mr. Herold, another member of this committee, is delayed by 
the washout, and Mr. Pratt, the third member, is in Japan. 

The next in order on the programme, is a paper on "Our 
Penitent Brother,'' by Bruce B. Lee. I have requested Mr. 
"Wilson to read it for him and oblige " our penitent brother." 

Mr. J. S. Wilson then read the following paper : 


Mr. President and Gentlemen : 

" Of all sad words of tongue or pen, 
The saddest are, ' It might have been.' " 

This sentiment warbles through my diaphragm, and seems to permeate 
my entire system. . I look back to the days of my innocence, and I reflect. 
An unfortunate memory tells me what I was before the wily Sexton and the 
subtle Kinne seduced me into writing fire insurance articles. And — oh, 
sorrow and desolation! — what I might have been had they not set me to 
thinking, to reasoning, and finally working to right the wrongs of the local 
agent and the assured; to considering the present incendiary - breeding 
system of fire insurance, the greed of the managers and the whole combina- 
tion working to fleece the stockholders and the people. But for these two 
"Daisies" I might have been pursuing the even tenor of my way, and be 
just like any of you — happy, and utterly lost to consequences or results^ 
But for them I still would be a guileless innocent, insuring Tom, Dick* 


Harry and the devil, cutting rates and giving rebates, and taking my pre- 
miums out in trade, investing the company's money to my own profit, and 
taking my 15 per cent, and seeing all the rest of the boys getting 25. 

These two devastating old sinners taught me that ours was a noble profes- 
sion — that we spread the great blanket of indemnity over a helpless people; 
that the owners of desolated homes would remember us in their prayers, and 
little children would be taught to lisp the names of Kinne and Sexton. I 
wanted some of that for myself. I got up neatly framed cards in letters of 
gold, "God bless our home— insure it with Bruce Lee;" "Insurance is the 
result of civilization — barbarians have no use for it;" "Insure with Lee." 

Only a pansy blossom, growing on sunny slope; 
Yesterday I was a darling daisy, 
But to day I am a wreck of hope. 

Oh, I had it bad! I worked hard; I thought and I,wrote; I took all the 
insurance journals; I devoured with an increasing appetite all the grand 
letters written for this Association. I even read Bromwell's letter to the 
Northwestern crowd. You may not believe it — / read it twice. I magnified 
my calling and got proud; felt above all other professions. I searched the 
Scriptures. I was especially tickled when our Saviour went after the law- 
yers and said, u Woe unto ye lawyers, for ye lade men with burdens grievous 
to be borne, and ye yourselves touch not the burden with one of your fin- 
gers. Ye enter not in yourselves, and them that were entering ye hindered." 
Life was a burden until I quoted this to a legal friend. I gloated over 
him and over the fact that this "wondrous Man of Nazareth" had never 
said aught against insurance men. My friend gave me a pitying smile 
and said: "No; Christ never said aught against an insurance man, but 
he did speak great words of comfort and of cheer, when he said unto 
that penitent insurance agent, "Verily I say unto thee, This day shalt 
thou be with me in Paradise.' " 

My brethren, we should frame these words in letters of gold, and hang them 
in all our offices. We should remember the fate of our impenitent brother, 
for he was a Manager— the peuitent one was a Local. I am glad that I 
am a Local, that I still retain the Local's yielding and forgiving disposition. 
I am glad that I have found out why it is that the blush of shame will occa- 
sionally mantle the cheek of an insurance man. I don't feel proud over my 
ability to out-blush any of you; but I do rejoice in being the discoverer 
of this great secret, of being able to trace our geneaology, and do a good 
clean job. I have always felt that I wasn't built and put on this earth, just 
for fun. I knew I was bound to develop something, and be a bright 
and shining light to the insurance fraternity. I am not proud over this. 
I will treat you all just the same — with the company's money. I am, in 
fact, just as serene; my temperament is just as mild, and I am just as 
amiable as a government mule. Thus endeth the prologue. 

This is the season of the year, when after the books have been made up, 
that it is meet and proper that we should indulge in a little reflection. 


Not too much, but just a little. Enough of it to act as a gentle purge that 
will cleanse us of a few of the sinful things we have taken on board 
during the year. I know that Kinne will be worrying over his rule, and 
that there is an aching void within him, because Sexton won't talk back. I 
know that when the day of reclamation cometh and Charles Mason has to> 
figure up the deeds done in the body, that that rule will be like a mill-stone- 
about his neck. I know that Messrs. Mullins, Cofran and Wilson will have 
told you all about the good Locals, and inspired you with a deep and lasting, 
love for the whole tribe. They know them. 

Ferry and Faymonville, on Forms of Policies ! Great Scott ! Mr. Presi- 
dent, where had you been and what had vqu been taking when you put those 
two together on a committee? It is bad enough for this Association to take 
a single dose from either, but when you deliberately unite the two, and 
on such a subject. I am glad I was not present; I am glad I am in no wajr 
related to the Clark family. Why, sir, do you know what that fellow,. 
Feny, did to me? I had been preparing a little retreat in the country.. 
Making ready for the hour when Tom Clunie and the " demuition bow 
wows" took us all in. I was plautiug trees and things; growing yaller- 
legged chickens and fat pigs, and Jersey cream, and " sich." I had taken 
Harry Naunton out to see it, and Harry was wild; had picked out his vine 
and tig, and estimated the possibility of stealing a hammock. When we 
came back to town, Harry threw his whole soul into the descriptive, and 
was wholesaling it out to a gang of Specials, Ferry among the number. 
When he had about run down, Ferry chimed in, "Yes, yes," said he,. 
" that's nice; when we come along here tired and worn out, we can run. 
over to Lee's and take a rest, eat figs and cream, take in the beauties of 
nature and the wonders of art, look over all of Lee's fine improvements, and see 
just how he is spending the company's money." Mr. President, the happi- 
est day of my life will be to go to that man's funeral, and charge up $20 to> 
his company for special work. 

But to resume: Chalmers will have been interesting, on Losses and Adjust- 
ments; and if he has lost anything himself, none of you will ever find it. 
Edwards will have been scathing, scintillating, brilliant. What he don't 
know about this present legislature will remain forever an untold tale. 
And George Grant will have something funny, but where he will get it from 
is beyond my ken, for I haven't given him a pointer for a whole year. All 
of them will be staid, proper and orthodox, and tell you nothing but what 
is in the books. They are all good boys, true lineal descendants of our im- 
penitent brother. Therefore, it remains for me to tell the tale of the past 

About the first and most important question that came up for considera- 
tion, after the dawn of 1886, was the Local Underwriters' Memorial. The* 
Pacific Insurance Union had assembled in full force and full dress, and had 
heard it read. It struck the sages about as the Declaration of Independ- 
ence struck George IV. They were undecided as to whether it was a "Josh'* 


or cold earnest. So they ordered it printed; then each sage read it a time or 
'two, and the result was the appointment of a select committee of seven to 
reply and report. This committee wrestled with it for a month, and went 
through all the stages of doubt and uncertainty. A majority held, for a 
•time, that the document was of divine origin; but a strong minority held 
Uhat Charley Dohrman had got full of beer and dreamed it, and Fogg had 
run it through his type-writer two or three times and shaped it up. This 
finally became the fixed opinion of the entire committee. The next question 
was the framing of a courteous reply. Two or three of them scouted the 
idea of replying to any communication from a lot of " scalawag locals." 
One old sage, however, read a list of the members of the Pacific Insurance 
Union, and suggested the impropriety of people who dwelt in glass domi- 
ciles, throwing any stones. The previous question was moved, and they 
went for business. The manner in which this rare document was handled 
will mostly remain a dark mystery. The grand truths contained therein 
-were " crushed to earth," and beaten black and blue; but, as of old, they 
i*ose again, and shone with brighter effulgence. 

The locals had solemnly declared that " the agency system, as conducted, 
Lad become inefficient and undesirable, and that it was chargeable with a 
larger percentage of our annual fire waste than all other causes combined." 
This proposition must be annihilated. We, the managers, must have this 
present system. It breeds incendiarism; it causes a fraction over one-half 
of the fires. But if there were less fires, the people would not insure. If 
there are fewer locals it will lessen the number of specials. A reduction of 
specials will empty managers' chairs in a corresponding ratio. Four or five 
of our present offices will be thrown into one. All of which means a de- 
creased expense account; a largely-increased profit, and a cleaner balance- 
sheet to the companies. They hooted it; but the truth of the locals' declar- 
ation stood there all the same — silent, but immovable. The locals next 
declared "that the elevation and full recognition of the local agent as one 
of the main factors in the business will result in an increase of the volume 
of business' ["Good !" says an aged sage], a reduction of the loss and the 
hazard ] 'Bully!" shouts a son of a sage], an increase of profit ['Hear, hear! 
irom a trio], a reduction of cost to the assured." "Oh, Helen — Helen 
Blazes! " yells a rheumatic sage, with a diamond stud, " Where's my hat? 
Where is the nearest drug store? " And that committee was beautifully less 
— by one. 

The fourth declaration of the locals was a "Balm in Gilead " to that re- 
maining six. "Proud victory " perching upon their banners, and "sweet 
peace pluming her wings " in their respective offices was a soothing vision, 
and they glided serenely along until they struck the "tired gleaners, "when 
another sage departed in quest of a forgotten Kuth. He never showed up 
again. The weary five struggled on to the graded commission, and then 
commenced a battle which lasted for hours. They belabored this proposi- 
tion in every conceivable manner; they cursed the man who originated 


it. But there it stands, clear and bright as the noonday sun — the only feasi- 
ble and practical solution to the entire business. They could not answer it; 
they could not show that it was impracticable— they only felt that it would 
purify and elevate the business, and accomplish what the field-men and the 
public wanted. But the business is not run in the interest of that class. 
On this rock the committee busted. The failure to give a courteous reply 
to the memorial might be considered a breach of the customs prevalent 
among gentlemen; the locals, however, do not so consider it. The commit- 
tee had simply too large a contract; none of them had ever had sufficient 
experience in the local field, as it is to-day, to be able to handle the subject. 
Yum, yum! 

The doings of the Pacific Insurance Union, or what we lovingly term 
"Our Compact," next commands attention. They labored much and 
brought forth faithfully. The first little simple conundrum was the aboli- 
tion of the vile credit system. This was received with joy by the hard- 
working local. The manager now heaves a sigh of relief when he remem- 
bers how he begged his agents to remit; how he advanced the premiums 
to the home office, and then never got them. It is awful easy to get busi- 
ness on the books; to sell goods and charge it up. But, oh! the patience 
and perseverance, the unceasing toil and waste of time required to clean 
that infernal set of books! None of that now; all serene. Play, or pay. C. 
O. D. is the memorandum on the wall. Tne 20th day of each month sees 
the preceding month all balanced and paid. No more six and twelve month 
balances for ye agent to skip out with. 

Next in order, if my memory serves correctly, comes the rating of barns 
and stock. Many good fat premiums had been lost, and the table of hazards 
knocked endways, because none but the worst risks had been covered. The 
best and cleanest we did not write on. No intelligent farmer would insure 
his private stable, ceiled throughout, in charge of one trusty man, and pay 
the same rate as on the old barn, with 100 tons of hay and 100 head of ani- 
mals and twenty hired men. The hazard was not at all proportionate. The 
small farmer, with his team of two horses and one cow, would not pay 2J per 
cent., and he was right. The grain rancher, with fifty head of horses and 
mules standing in a barn about three months of the year, and the balance of 
the time in open corrals and at feed-wagons in the field, could not see it. 
His conclusion was that insurance was a funny business, and that there 
was a lack of brains somewhere. The hazard is governed by the number of 
animals, as that determines the number of hired men. The number of men, 
the number of fires, in about the same ratio that the number of agents 
and specials make things lurid in the same direction. The author of this 
great reform was a native of the Fiji Islands, which accounts for the prompt 
action of the Hating Committee, in making the schedule. 

The next important move in the rating line, was the making of an extra 
charge for chimneys not built from the ground. The author of this brilliant 
proposition is unknown. This is a matter that weighs upon me. I am 


not an author myself of anything, but I always like to know authors- 
The Compact passed this, and repealed it in less than a week. I think the 
intention was to make an extra charge for chimneys less than eight inches 
thick from inside to outside. But this chap got elevation and depth into his. 
head instead, and thus made a muddle. But election time came upon us, 
and we all got into politics, or I am satisfied more would have been done. 
Nevertheless, more was done by that election than some of you are aware 
of. It was not a contest between the two grand old parties — nothing of 
the kind. The insurance business has become the all-absorbing subject. 
Even Flood and Mackey have abandoned stock deals and gone into insur- 
ance, and of course everybody else follows suit. It's a good thing, and we 
all want some of it. Now, of course, the selection of 80 Assemblymen and 
20 Senators who are thoroughly up in the "hazard of general chances," 
and know all about the business, and who can make a Rate Book that will, 
suit Will Green, and pacify Marc. Boruck, is the real bottom of this electon. 
And we did well. We got Harry Mann and Tom Clunie both in, and with 
thirty or forty, others they are just now making things lively. Insurance 
legislation is next to the real thing itself, and we can't have too much of 
it. The Valued Policy law will not pass; it was not a live issue in the cam- 
paign, and, besides, Flood don't want it; and Mackey can make up his own 

But the license bill! That's the little item that wakes us all up. The sum 
and substance of this measure is that it prohibits any company from issu- 
ing a policy, except through a licensed agent. It prohibits any broker, agent 
or solicitor from soliciting or inviting any insurance, unless he holds a li- 
cense for the county in which the property to be insured is located. The 
whole effect of the bill will be to make about two agents for each county. 
It is, without question, the only proposition ever broached to a legislature 
that covered the entire ground. With from one to not over three agents in 
all counties outside of the large cities, there will be no need of much of 
our expensive machinery. With but one-tenth of the present number of 
agents, the quality will improve. Every man to his own business, is a mighty 
good thing to paste in your hat. The lack of good, reliable and qualified 
agents is what's the matter with the Solons in the present legislature. 
They think it is the Compact, or the companies, or the infernal swindling 
adjusters. No such thing ! Wherever you have been decent enough to en- 
courage and permit to live, and a good, first-class agent has grown up and 
studied the interests of all parties to the contract, you will find a satisfied 
people. It is the number of agents that is the root of the whole evil — the 
bane of your's and the people's existence. But one manager objects to 
this bill because Tadlock will have a monopoly of Fresno county, and he 
won't give his company a smell. Bosh ! Tadlock don't care a continental 
for you now, because one agent more in forty don't hurt him. But the 
moment he is sole agent, he has it all — has a nice income, and ivill keep it. 
He will satisfy all of you, and divide up the lines on any basis you may 


agree upon. If you put in another agent against him, you hurt. He knows 
"what the old fight is, and wants none of it. Tadlock wants smooth water — 
"wants peace — and will give you his whole time for 10 per cent.; and if he 
won't, somebody else will. 

A special objects to the bill because it prohibits him from going into the 
field and capturing a large block of grain "for his agent." Right! A 
special has no business soliciting There is plenty for him to do; and if he 
can't find it, he is not fit for his calling. This bill will largely reduce 
the number of brokers, and give you a better and more reliable class. The 
less the number, the better control the managers can have. The larger his 
business, the less commission he will require. It has been reported that 
this bill was gotten up by the local union. No such thing! It emanated 
from two prominent specials, and is entirely in the interest of the compan- 
ies and general agents. We, the locals, have no use for any such law, or, 
in fact, any law We favor the present anti-compact bills. We want things 
loose; there is then a chance for an ordinary fellow, with a little brains 
and rustle, to get away with something. Most of us have enjoyed our 20 
and 25 per cent, right through the compact rule. If it "busts," we will 
get 40 per cent., and if it lives, we will still be on top. Our commissions 
are the least of our troubles. We can fix that too easy, except with a few 
old sages, who have been asleep for the last fifty years, and don't know that 
this is the nineteenth century — don't know our family history; don't know 
that the Local is completely and entirely the master of the situation, com- 
pact or no compact, law or no law. But thus endeth the funny business. 

And in conclusion, Mr. President and gentlemen, am I not right? Would 
there be any sense in my writing you my true thoughts and feelings, any 
wisdom, in earnestly showing up the evils that beset our calling, or en- 
deavoring to mark out and shape a line of policy, that would place insurance 
far above all other professions ? No, sirs; the question is too broad. It is 
too much of a Kilkenny-cat fight. Each of you are going for all that there is 
in it, and if I should throw myself into any deadly breach, none of you would 
back me. But, nevertheless, a goodly number of you have known me for 
long years, and know that the "hooks of steel" that bind our hearts to- 
gether, are "growed in." If one of you are ever brave enough to make a 

break, just rely on my following. 


The Chair — I see it is twelve o'clock, and this afternoon we 
shall have several papers, a paper from Mr. Fenn, another from 
the Committee on Statistics, and then we will have the balance 
of the Knapsack. Then there is the report of the Committee on 
Library, to be followed by the election of officers for the next 
year. If there is no objection we will take a recess until two 

The meeting was then adjourned until two o'clock. 



Afternoon Session, 

San Francisco, Wednesday, February 16, 1887. 
Shortly after two o'clock the meeting was again called to order 
by the President, Z. P. Clark. 

The President — I wish to present to you a member of the fra- 
ternity, who is not a member of the Association— Mr. H. E. 
Williams, of the National Insurance Company of New Zealand. 
We shall be pleased to hear from you, Mr. Williams. 

Mr. H. E. Williams arose amid applause and spoke as follows: 

Mr. President and Gentlemen: — I am very much obliged to 
you for giving me the privilege of being here to-day. I have 
followed your report and the publications of your organization 
from year to year with very great interest, and I can say I was 
not at all disappointed in the matter brought before the meeting 
yesterday, and the debates resulting thereon. Our General 
Manager, Mr. Jack, who has visited your States, and has seen 
the working of your business, has always spoken in the highest 
terms of the way it is conducted in this State, and our company 
has had the courage to follow, as far as we could in our circum- 
stances, your footsteps. I thank you very much for the privi- 
lege of being present at this meeting. [Applause.] 

The President — We will now pursue our programme and listen 
to a paper on "Fire Department and Water Supply," by Mr. 

Mr. C. P. Farnfield — Mr. President and Gentlemen : I am 
very, very sorry to have to make an apology. It is not because 
the paper is not ready, but it is because the elements have been 
against our receiving it. The committee thought it was hardly a 
subject that would bear two papers, and Mr. Gurrey, the second 
member of the committee, kindly undertook to prepare this 
paper. Some three weeks or a month ago he brought it to me 
in its preliminary stage, with a request that I would go through 
it and make what suggestions I thought fit. I went through it 


carefully and I found that it was a good paper — a first rate- 
paper. I returned it to Mr. Gurrey, to put it in form for presen- 
tation, and he went off with it in his pocket, and told me that 
he would forward it from Los Angeles in time for the annual 
meeting. It did not come to hand, but I have a telegram from, 
him, dated February 14th, from Los Angeles, saying that the 
paper is mailed. It has not reached here, and the elements 
have been against us, as apparently they have in other cases. 
This is the apology I have to make. 

The President — It comes of too much " water supply," I sup- 
pose. We will pass that and proceed with the subject of " The 
Good and Bad in the Business/' by Mr. T. W. Fenn. 


Mr. President, and Gentlemen of the Fire Underwriters* Association of the 

Pacific : 

It must appear from the title to my paper, that I set myself up as a. 
ceusor, but you must pardon any apparent egotism, for it is more apparent 
than real. 

For the "good" of the business, congratulations are in order upon the- 
success of the Compact on this Coast. It has been successful in curing; 
many "lapses," but many yet remain. Being such a stupendous undertaking, 
everything cannot be accomplished at once. It has served to develop a most 
excellent quality in the profession, and that is "backbone." If any need 
it, it is the insurance corporations. Centering as they do large funds, they 
are exposed to assaults on every hand, and at the present time lobbyists and 
legislators are combined to demolish not only the Compact, but the very 
companies themselves, and it behooves us to use freely this M backbone" to- 
confront prejudice, clamor, misrepresentation, and last but not least, vexa- 
tious bleeding suits and bills. 

The Compact has regulated free trade in insurance; has shown the policy- 
holder how to improve his property against the fire hazard, and when this; 
has been done, reduced his rate, and has secured a uniformity in business. 
It has advanced the knowledge of insurance to many of its heavy patrons; 
and whatever helps to disseminate its principle and object, is a benefactor. 

I would suggest that it might go further, and issue monthly a bulletin of 
advice, for general and gratuitous distribution. Its progress in well doing, 
has been rapid, and we hope its end is not yet. By bringing to its aid the- 
Inspection Bureau, Fire Patrol and Fire Marshal, it may yet develop "Causes 


of Fires" so as to reduce protection to perfection, losses to a minimum, 
and rates as low as the most carping mind or ".ambitious" legislator could 
desire. There is no end to the good it may do and has done. 

Among the many evils to which our profession is subject, I would briefly 
mention "legislative action." 

For the past twenty years there has not been a session of the Legislature but 
that more or less of acts purporting to ''regulate " the insurance business in 
the interest of the dear public has been presented. Its biennial occurrence 
teaches us that steps must be taken for the proper organization to resist 
what is fast approaching prohibited regulation. Nearly every " bill " pre- 
sented is intended as a tax upon the business, and reflective minds must 
consider that whatever is a tax must be got back by raising the price of the 
goods; and as the tax must eventually come from this very dear public, it is 
not difficult to say who is hurt the most. Educate the people in this, and 
we will have their aid in opposing unjust legislation. Among the many and 
most prominent bills of this year, is the resurrected so called ' ' Valued Pol- 
icy," Tliis has been presented before, under various guises, all equally evil. 
It makes the companies entirely responsible for misrepresentation and over- 
insurance on the part of the assured, and is a constant premium upon in- 
cendiarism. Does the bill lessen fires? No; it increases them, for it leaves 
no incentive for the assured to protect his, and the property of others like- 
wise jeopardized. 

The companies must bear the burden of it all. So many reasons present 
themselves against it, that the limits of my paper are too small to contain 
them all, or any number. Again I call for more instruction to the public 
upon the "Valued Policy." Let them know, as Superintendent McCall, of 
New York, said, "Losses by fire are a tax, by a destruction of value, that is 
not replaced by the companies payments." Unless the policyholder has an 
interest in the property insured, losses shall certainly increase, as is proven 
in every State where the Valued Policy has been tried. 

Most of these bills are meant to subserve private animosities; some to 
make money for their proposers. A firm and diguified statemenf, showing 
clearly and plainly the objectionable features of the proposed legislation, 
should be presented broadcast to the general public, and finally, as a last 
resort, to the Governor, that his veto may be our safeguard. It is certain 
that a large amount of instruction must be given, but that is even better to 
encounter than to be compelled to visit Sacramento every two years to com- 
bat dishonest legislation. 

Another evil of the profession is, in the irregularity of the form of poli- 
cies. Very few holders of policies ever read them, or know how well they 
are adapted to their needs, and never learn until the fire and the adjuster 
comes. It would be an easy matter to digest the contents of a few policies; 
but the large possessors, holding a number, would find many apparently, and 
some really, conflicting regulations. How many, only the adjuster can tell. 

All this should be regulated, and a commission of insurance meu should 


be appointed who should establish one form, to which all companies doing 
business in the State should be compelled to conform. Many difficulties 
would then be overcome, and there need be no chance for difference among 
the companies. Even the Kinne rule might become obsolete. 

Not long siuce I read an article, '• Hard is the Road to Justice." Strange 
as that may sound, to go to law is sometimes to have a conflict with injus- 
tice. Companies so of ten find this to be the case, that they are generally 
reluctant to make their defense in courts. Yet they are bound to go there 
occasionally, for the attempts made to impose on them and rob them of their 
funds without right, are frequent. The most common impression seems to 
be, that when an insurance company has received the premium and issued 
the policy, it is bound to pay any losses that may occur under it, whatever 
the tenor of the contract, and however grossly they may have been violated 
by the insured. Instruction is again a remedy for this. 

I cannot close without referring to the evil of companies not paying all 
just and reasonable charges attached to the settlement of losses. I refer 
more particularly to the case in establishing general or district agencies, 
where the agents are supposed to attend to adjustments. Unrequited labor 
is the poorest and dearest in the end. The companies will always suffer 
under these conditions, and slip-shod adjustments be made. 

Sometimes offices, to obtain agencies of companies, hold out as an induce- 
ment, that they will attend to adjustments at their own expense. If the 
companies would stop to consider this condition in all its bearings, they 
would decline to make it a part of their contract. 

Thanking you for your attention, and assuring you that in my remarks I 
seek only the advancement of the profession, 

I am, yours truly, T. W. FENN. 

The President — I am sure our thanks are due to Mr. Fenn 
for a very interesting paper. 

The next is a paper on " Statistics/' by Mr. W. P. Thomas, 
which paper I have asked Mr. H. M. Grant to read. 

Mr. H. M. Grant then read the following paper on " Statis- 
tics," prepared by Mr. W. P. Thomas : 


Mr. President, and Gentlemen of the Fire Underwriters' Association of the 


Your Committee on Statistics, although fully aware that "procrastination 
is the thief of time," have put or? from day to day, yes, until the last mo- 


merit, the duty they owe to their fellow members of this Association, in pre- 
paring an article on Statistics. Until yesterday, we had almost decided to 
let it go by default, and bear with unfeigned resignation the righteous indig- 
nation you would have heaped upon our unworthy heads. It is still an 
undivided question in our mind, whether it would not have been better to 
be reprimanded by our President and yourselves for dereliction of duty* 
than to present the few figures we have compiled at this late hour for your 

We cannot complain of want of time necessary to the compilation of an 
elaborate report on the subject assigned us. We have no doubt but what 
statistics are eagerly sought after by those engaged in the legitimate busi- 
ness of fire insurance. They not only receive a great deal of study by our 
presidents, secretaries, managers and general agents, but of late we find that 
others not directly engaged in our business are also studying them— at Sac- 
ramento; and as far as appearances can by judged at this time, certainly not 
in the interest of the companies or the iusuring public, although it may be 
in the interest of the lobbyist, who is always found at the houses of legisla- 
tion to wage war against insurance corporations at every session. 

The daily pffpers of late have been full of statistics — percentage of losses 
to premiums, percentage of profit on capital invested, and almost every 
other percentage. Our talented managers, presidents and general agents 
have been to Sacramento talking statistics to our legislators, who are de- 
sirous of regulating the insurance business and rates to suit each and every 
one. Certainly, they can have no pecuniary interest in it; but being elected 
to represent the public, they must make laws or "something to show their 
constituents they have not been idle." They go there for that purpose. 

Statistics inform us that these raids on insurance companies are periodi- 
cal, and while they come high, we must have them. At this session of our 
Legislature the particular fight has been made against foreign insurance 
companies. I believe in fair play to all companies, whether local, Eastern or 
foreign, it being a well known fact to all engaged in the insurance business 
that foreign companies have paid vast amounts for losses in the United 

To show you the results of the business of foreign offices doing business 
n the United States from four to twenty- five years, I herewith p resent to 
you thefollowiug reliable table, which is correct to fractions: 



Recapitulation of Percentage of Losses to Premiums. 




















Liverpool and London and Globe... 

Queen , 

North British and Mercantile 


Commercial Union 


London Assurance Corporation 




British America 

Western Assurance 

Northern Assurance 


London and Lancashire 

Norwich Union 


Lion Fire 

Scottish Union and National 

Fire Insurance Association 

Sun Fire. 

United Fire Re-insurance 

City of London, Fire 



Liverpool, England 

Liverpool, England 

London, England 





Manchester, England... 

Liverpool, England 

Hamburg. Germany 

Toronto, Ontario 

Toronto, Ontario 

London, England 

Hamburg, Germany 

Liverpool, England 

Norwich, England 

London, England 

London, England 

Edinburgh and London. 

London, EngHnd 

London, England 

Manchester, England ... 
London, England 

Per cent. 























1885—258 years' aggregate experience of 23 companies 62.4 

1884—233 " " " 24 '■ 68.3 

1883—240 " " " 30 " . 61 

1882—210 " " «■ 30 " 62 

188L-167 " " " 22 " 60.9 

1880—115 " " " 10 " 60.3 

Making the average expense of conducting the business 35%, it will be readily seen 
that Foreign Companies have made but little profit on American business. 

To return to the statistics of our State business. During the year 1886 
ninety-nine companies transacted fire insurance business in this State, viz. * 
ten locals, fifty-six Eastern, and thirty-three foreign. During the year, two 
Eastern companies withdrew from the field, viz.: the New Hampshire and 
Northwestern National. One Eastern company was admitted, viz.: the 
Southern Insurance Company, of New Orleans, and one foreign company, 
viz. : the Magdaburg Fire, was also admitted during the year. 





Amounts written. 

{Premiums on 



tage to 




1 80 












1 60 




Totals for 1885.... 


Gains for 1886 




















































Of the entire Pacific Coast business we have made no mention, for the 
reason that in the State of Oregon, Territories of Washington, Idaho, Mon- 
taua and Utah, it is impossible for us to secure the exact amounts written, 
with premiums and losses thereon, for the reason that companies writing 
therein do not all report to one location, some reporting to the East and 


others to the West. It would be interesting, indeed, if we could get the 
exact figures, as they would undoubtedly prove of great interest, if not of 
advantage to insurance corporations. 

In this connection we would say, that as some of our companies, local, 
Eastern and foreign are transacting business in the Kingdom of Hawaii, and 
others in the Province of British Columbia, the returns would also be in- 
teresting could the exact premium, income and losses be ascertained. 

Mr. Carpenter, who was on the Committee of Statistics in the year 1885, 
gave us the average rate of premiums for the years 1871 to 1875 inclusive, 
showing that in 1871 the average was the lowest, viz.: 1.08, and in 1885, the 
highest average, viz.: 1.60 per cent. The year 1886, just closed, will show 
the largest average, viz.: 1.68 per cent. We will also state that in 1871 the 
average loss was 77 per cent., while in 1886 it has reached the highest figure 
since that period, viz.: 51.2 per cent. 

By reference to our tables, it will be observed that there was an increase 
in premiums for the year 1886 over that of 1885, of $614,502, while the in- 
creased losses for the same period were $621,156, or 96 per cent, of the prem- 
ium increase. This result shows that the companies have not gained by the 
increase of rate, when taking into consideration the cost of transacting the 

Our report will also show that the California companies have received the 
smallest rate on their State business, paying also the smallest percentage of 
losses. The Eastern companies have received an amount far beyond the 
average, while paying but a very little over the average loss; the foreign 
companies receiving a small amount below the average, and paying a consid- 
erable percentage over the average ratio of loss. 

Another interesting feature is that, on the State business, the local com- 
panies have gained 2 per cent, of the premium income, as compared with 
last year, while the Eastern companies gain 1, and the foreign companies 
lose 3 per cent. 

If it were possible to have a uniform classification of hazards adopted and 
kept by all companies, showing the premiums received thereon, with losses 
paid on same, it would certainly be a very interesting study, and a guide in 
equalizing rates on each particular hazard, as well as a great satisfaction to 
know in all cases the class of hazards on which money was made and lost. 
Much might be said on this subject. It has often been suggested by other 
committees on Statistics, and we hope in time to see it adopted by all. If 
in order, we would suggest that a uniform classification of hazards bo 
adopted by the Pacific Insurance Union, if possible, dating from the first day 
of January, 1887; for it certainly would be very interesting from a statistical 
point of view for the next committee to present to this Association. 

Respectfully submitted. W. P. THOMAS. 

The President — It is ray impression that the shorter the time 
alloted for the preparing of the papers, the more elaborately. 


they are gotten up. That is a suggestion for the future. I 
believe Mr. Gunnison had a day and a half, and it was a very 
good paper. 

The next on your programme is, " Local Agents' Associa- 
tion," by Mr. G. F. McLellan. This is another case of too much 
water supply. He says it was mailed Monday, and should have 
reached us yesterday, but it is somewhere in the washout 
between here and Los Angeles. 

Next in order is a report from our Library Committee, of 
which George W. Spencer is Chairman. Mr. Spencer is not 
here, but Mr. Sexton is here. 

Mr. Sexton — Mr. Spencer has the report. 

The President — I believe Mr. Ferry has a voluntary paper 
here which we should like to listen to. 

Mr. Ferry — This is for the next meeting. 

Mr. Chalmers — Mr. Ferry has a good paper in his pocket now. 
It is in reply to the paper of Bruce Lee's, so far as Mr. Ferry is 

Mr. Ferry — It was not intended for the public. It is simply 
that I got here before the meeting was called to order, and I 
penciled an answer to Bruce Lee, which is hardly worth the 
notice of this Association. In fact, it is in a very loose state. 

Mr. Fenn — I think the members of this association are the 
best judges, and as one of the members, I will call upon Mr. 
Ferry for his paper, whatever it may be. 

The President — I have no power to force him. 

Mr. Ferry — It is not a paper at all. It is simply a note, and it 
is not in a shape to be read. However, if the Association desire 
me to read it, I will read it if I can. 

Mr. Bruce Lee is a friend of mine. I met him in a foreign part 
of the State, and he has seen fit to call attention to private mat- 
ters, and I thought I would give him the benefit of a reply. In 
the first place I say that I have a pass for Mr. Lee which I am 


going to have engraved, and ask the President and the Secretary 
of the Association to sign it, to the interesting event in which he 
desires to participate. 

San Francisco, February 16th, 1887. 
Bruce B. Lee, Esq., 

Insurance Agent, Red Bluff, Cal.: 

Dear Sir — Your letter to the Association, which was read at this morn- 
ing's session, relieved my mind on one point. There will be at least one 
person at my funeral. My little girl had a favorite aunt, and to prove to 
her how much she loved her, told her one day, "Auntie, I'd ruther put flow- 
ers on your grave than any udder body's in the world." I take your re- 
marks in the same spirit, and feel happy in knowing that I will be able to 
make it pleasant for you on one occasion at least. The affair when it comes 
off may be a little exclusive, and that there may be no chance of your being 
deprived of the pleasure you anticipate, I send you a pass. It will positive- 
ly be the only one issued. I will endeavor to have it come off before you 
become too old and infirm to attend, and at a season when the walking is 
good. Friendship can do no more. 

I regret that I can pass you no further than where the ceremony ends, or 
even invite you to continue the journey with me, for I know that St. Peter 
would not admit you to the upper circles where I expect to roost, for, is 
there not a sign over the gate, "No insurance man admitted! " How will I 
get in? you naturally ask. St. Peter will open the big ledger, and, turning 
to my account, find that it stands as follows: 

dk. Marks. Marks. 

Served as local insurance agent several years 1,000 

(1,000 Cr. marks, barring admission.) 


Ser\ed several years as adjuster and general agent 1,000 

Note— Lost all qualifications of local agent; forgot what he knew of 
the business; no use for knowledge; depends entirely on local agents.. 100 

Served for five years as special agent doing missionary work among 

local agents 100 

Note— An unusual credit given for special services in the vain at- 
tempt to convert one Bruce B. Lee, an insurance agent, living at a 
place called " The Bluffs/' supposed to be named from the principal 
amusement and employment of its inhabitants 1,000 

Total 1,000 1,200 

Cr. balance 200 

entitling him to admittance and a reserved seat. 

I am sorry I will not be able to meet you there, Bruce. How do I know! 
Simply because St. Peter has given the following order to the assistant gate- 
keeper: "There is one Bruce B. Lee, who is smart enough to get certificates 
which would admit him here, but he must be kept out, for we have a few 
insurance managers who have managed to squeeze in, and, if Bruce gets in, 
he will raise the very d — 1 among them." 


On the interesting occasion referred to in the first part of my letter, I can 
assure you that you need not fear any disappointment in my not being pres- 
ent. I will be there. 

With kind regards, I am yours faithfully, 

Special Agent and Adjuster. 

P. S. — You can't ring in any charge for special services on the occasion 
referred to, as you suggest in your communication to the Association. The 
Compact distinctly forbids local agents receiving compensation for special 
work. F. 

N. B. — Can't you sent in a few gilt-edged risks to help pay the expenses of 
the ceremony? F. 

Another P. S. — It is supposed that one reason why you can't gain admis- 
sion is that you are not a soul (sole) agent. That's the worst I ever heard. 


The President — We will now have the pleasure of listening to 
the remainder of the Knapsack, which was unfinished yesterday, 
by Mr. Geo. F. Grant. 

Note. — The Knapsack is printed entire on pages 36 to 73. 

Mr. Carpenter — I have a telegram from Carson which reads 
as follows : " Carson, February 16, 1887. Bill No. 55, Valued 
Policy Bill, killed. J. B. Stillman." [Applause.] 


"Theirs not to make reply, 
Theirs not to reason why, 
Theirs but to do or die." 

Gentlemen of the Underwriters' Association: 

Our President has ordered me to prepare a paper for this meeting, and 
has suggested as a topic "The Relations of the Local Agents' Association to 
the Pacific Insurance Union." The time since receiving the notice has been 
so short and so fully occupied by office work that it is scarcely possible for 
me to do justice to any topic. 

. The Local Underwriters' Association is a body composed of some of the 
local agents who make insurance their sole or principal business. Its objects 
were to elevate the standing of the profession in fact and in the esteem of 
the public, and to aid in carrying out the objects of the Pacific Insurance 
Union. It met and it prepared a memorial setting forth its objects and de- 

fir£ underwriters' association. 129 

sires. I was not present, and while most heartily favoring the objects, was 
not in favor of all the means proposed; possibly they were suggested as loss 
claims are presented, with a view to the cutting down process that might 
follow. But whatever criticisms may have been justly made upon it, there 
can be no doubt that it was conceived in a noble spirit and with due respect 
for the body to which it was to be presented. It was presented, and " with 
the loud laugh that speaks the vacant mind," thrown aside; some of the 
members of the Union whose knowledge of themselves it would ill become 
me to question, declaring that they were dogs and that this was an attempt 
of their tails to wag them — this dignified, bit of waggery, borrowed from the 
antediluvians, being the only argument of which they appeared capable. 

This action was doubtless the cause which, in connection with the very 
apparent difficulties, in the way of meeting, led to the future inaction of the 
association; and therefore, as the Union may be said to have sat upon the 
association, the relation of the former to the latter may be briefly summed 
up as that of the corpse— "a rather lively one" — to the coroner. From pres- 
ent indications it appears to be the intention of the Legislature to sustain 
to both the relation of undertaker — /'rider and horse in one fell funeral 

But, despite the present^funereal aspect of our position, still trusting that 
the Compact may yet have before it many years of useful and honorable life, 
and that it may so commend itself to the public that any attempt to destroy 
it would meet with general execration, let us consider some of the ways in 
which an association of local agents may be made to perform an important 
part in strengthening and popularizing the Union. And that can be done 
by carrying out the objects of the Association. 

The first of those objects was to have the local interests of the companies 
intrusted to a body of men educated to the business, and making it their life 
work. To say that three-fourths of all thos9 now acting as local agents are 
not and do not intend to be professional underwriters, is speaking within 
bounds. In fact, few of them do continue in the business any considerable 
length of time, or try to learn any of the principles governing it. Through per- 
sonal influence, by unabashable persistency, or in other ways, some of them 
add to the premium receipts of the companies; but, as the number of agents 
is so large, they soon find that there is little to be secured by each; and as 
they have no interest in the vocation, they drop out. In Los Angeles there 
is scarcely a week in the year when a special cannot be seen in quest of a 
man to take the place of one of this class, and when he leaves here he goes 
elsewhere on the same errand. 

Second. The local underwriters desired that to "the locals should be left 
the business of their several localities; that San Francisco brokers should 
not be permitted to trespass on their domain; and that persons controlling 
large lines should not be granted agents' commissions, that by this means 
they might be allowed a rebate, aud thus defeating one of the objects for 


which the Union ostensibly was formed, and defying the spirit of the law 
while obeying its letter. 

At leaBt one-half of the policies written by the average local do not pay for 
the time devoted to securing the lines. Who will make insurance a busi- 
ness when the risks worth having are written by their owners? In what 
other branch would it be tolerated, that one party to the contract should be 
agent of the other? Would a wholesale merchant sell on credit to a retailer, 
on the report of the latter as to his own character, standing, business, pros- 
pects, etc. ? Yet an insurance manager intrusts all this, and more, to the 
customer who buys his policies. 

The local underwriters desired that they be kept informed as to the rules 
they were expected to obey, and the interpretation placed upon them, and 
that there be uniformity in enforcing them. They desired, also, that there 
be regularity in the visits of surveyors or assistant managers, in order that 
the assured might not for months be left in doubt as to what rate of prem- 
ium he should pay. 

Is one of these demands unreasonable ? Are not all in the interests of all 
parties ? 

The Pacific Insurance Union is not an absolutely independent body; it 
cannot act in an arbitrary manner without endangering its own existence. 
While some, and they the ablest and best of its members, recognize the jus- 
tice and reasonableness of the demands, and are glad to receive the sugges- 
tions of their employes, not a few take for their motto the lines from Tenny- 
son, which are at the head of this paper, and act accordingly. 

Let the fears of the present lead to a little wise retrospection, that we may 
guard against future perils. 

The business of insurance in this State can be conducted by a compara- 
tively small number of trained specialists. How much more influence would 
they have than the multitude who now are giving odds and ends of their 
time, and none of their hearts, to the work? 

The feelings of the several communities towards the companies are influ- 
enced chiefly by the local agents. The Union approaches the vast body of 
the assured through the locals. Can it be expected that a, property-owner 
will feel great respect for a business that approaches him in the guise of from 
a dozen to fifty solicitors, each of whom appears to know nothing but that 
he wants that risk? And is the respect likely to be increased by the frequent 
changes in agents, and the necessity for rewriting or indorsing policies 
which arises from errors in the original made by inexperienced policy- 
writers, or from new interpretations of old rules? The general undertone of 
distrust and dislike of the Union, the recent exhibition of which appears to 
have astonished the general agents, was well known to exist by active local 
agents. And it had its origin less in the supposed increase of rates than in 
the annoyances to which I have referred, and which the Local Underwriters' 
Association planned to avoid. And the untaught agents who are ''here to-day 
and there to-morrow," are far from free from the impression formerly prevail- 
ing that they could do better if they could cut rates; feeling that even in a 


general cataclysm those with least to lose would have the best chance for 
bettering their condition. It seems as if one must be deaf to the teachings 
of experience and blind to all that goes on about him, not to feel and know 
that the multitude of makeshift agents, who care little for the business, or 
accept their appointment only to save the commissions on their own prem- 
iums, is an element of weakness and danger. 

And, while not immediately bearing upon the subject, permit me to say, 
that the less the Union is known to the assured, the less will be the hostil- 
ity to it. Every time that the attention of a property-owner is called to the 
Compact by a raising of rates, by an und^esired endorsement on his policy, 
he is adding a new count to the indictment of the Union he is forming in 
his own mind. Of course, when the agent is obliged to approach a cus- 
tomer for any such purpose, although he may in good faith attempt to de- 
fend the action, he does not fail to have it understood who causes the 
trouble. A reduction is forgotten, or considered simply a return to long- 
denied justice, but the objectionable changes are long remembered and never 
cease to annoy. "The evil that men do lives after them; the good is oft 
interred with their bones." 

Cannot all whose present and future interests are bound up in the busi- 
ness of insurance unite, and with mutual respect and forbearance labor 
together to elevate the tone of the profession, to relieve it, as far as possible, 
of its objectionable features, and to gain for it the support and confidence of 
the people? Kenan has said: " In action one is weak by his best qualities, 
and strong by his poorer." Is it not time that this ceased to be obtrusively 
and offensively true of the work of the insurance agent ? 



Mr. President and Gentlemen: 

A certain wise man years gone by made the remark that "Verily, there is 
nothing new under the sun," and the truth of the saying never struck me 
so forcibly as when I sat down to write on what appeared to be, after over- 
hauling what had been written in former papers, a most threadbare subject, 
"Water Supply and Fire Department." 

It is difficult to dress such a matter up so as to make it interesting. You 
cannot throw any romance into it, and it has apparently no funny side; and 
yet it made me smile the other day, while reading over a description of 
some of the earliest attempts at apparatus for extinguishing fires. The 
first mechanical contrivance that was invented, in what year, though, I am 
sorry to say I do not know, was a squirt or syringe. Their construction 
was simple. Each squirt was about three feet long, with an aperture at 
the lower end about half an inch in diameter, and a capacity of about half 
a gallon. It had a handle on each side, and was worked by three men, two 
to hold the squirt and one to work the piston. You can imagine such a 


machine being used at any of our late city fires. Numbers of these squirts 
were kept by the parochial authorities in London, as the small fire engines 
were later on. 

The first fire engine was invented in Germany, by a man named Hautsch, 
in 1657. It consisted of a cistern, which had, I suppose, to be filled by hand, 
and a sort of a force-pump that was worked by long levers. When they were 
introduced into England we do not know, but probably towards the end of 
the seventeenth century. In France, we find that in the year 1699, Louis 
XVI. gave an exclusive right to one Duperier to build certain machines, 
which were called Pompes Portatives, and seventeen of them were pur- 
chased by the city of Paris. In the year 1722, the number was increased 
to thirty, which were distributed in different quarters of the city. 

In 1668, two years after the great fire of London, we find in an order of 
the Corporation of London, that the city was divided into four quarters in 
respect to the suppression of fires, and the regulations enacted throw con- 
siderable light on the fire police system of the times. Some of them read as 

Item. — That every one of the said quarters shall be furnished and provided, at or be- 
fore the Feast of our Lord God next ensuing, of eight hundred leathern buckets, fifty 
ladders, viz., ten forty-two foot long, ten thirty foot long, ten twenty foot long, ten 
sixteen foot long, and ten twelve foot long; as also of so many hand-squiris of brass 
as will furnish two for every parish, four and twenty pick-axe sledges, and forty shod- 

Item.— That all the other inferior companies provide and keep in readiness buckets 
and engines proportionable to their abilities, of which those least able to provide 
portable engines to carry upstairs into any rooms or tops of houses; the number of 
which buckets and engines to be from time to time prescribed and allotted by the Lord 
Mayor and Court of Alderman's direction. 

Item.— That every Alderman who hath passed the office of Shrievalty, provide four 
and twenty buckets and one hand squirt of brass; and all those who have not been 
Sheriffs, twelve buckets and one hand squirt of brass, to be kept at their respective 
dwellings; and all other principal citizens and inhabitants, and every other person being 
a subsidy-man, or of the degree of a subsidy-man, shall provide and keep in their houses 
a certain number of buckets, according to their quality. 

Besides all this and a great deal more, the corporation made an extraordi- 
nary series of regulations, so extraordinary indeed, that we may readily doubt 
whether they were ever acted on. For instance, it was ordered that every 
householder, upon the cry of "fire," was to place a "sufficient man " at his 
door, well armed, and hang out a light; that every householder was to have 
a vessel of water at his door in case of fire; that the several companies of 
carpenters, bricklayers, plasterers, painters, masons, smiths, plumbers and 
paviours should each provide thirty persons to attend on the Lord Mayor 
whenever a fire might occur; that all porters and waiters within the city 
should similarly attend; that all other persons during a fire should keep 
within their houses, unless expressly sent for by the Lord Mayor; that all 
brokers on the Exchange should attend to guard the goods and merchandise, 
together with o^ber and perhaps more practical arrangements , 


But, by and by, when the fire insurance companies began to come to the 
front, a decided change was seen in the facilities for extinguishing fires. At 
first, each insurance company owned its own engines and maintained a fire 
company. In 1808, Sir Frederick Morton Eden, chairman of the Globe In- 
surance Company, suggested that the various insurance companies should 
work in co-operation in order to save expense, but only one company fell in 
with the idea, and so it was dropped. Seventeen years after, the Sun, 
Union and the Koyal Exchange, and later, the Atlas and the Phoenix united 
their fire engine establishments. In 1833, most of the companies seeing the 
benefit of co-operation, pooled their issues. The companies were the Alli- 
ance, Atlas, Globe, Imperial, London Assurance, Protection, Royal Exchange, 
Sun, Union and Westminster, and subsequently the British, Guardian, 
Hand-in-Hand, Norwich-Union and Phcenix joined the establishment, and 
thus the nucleus of the present fire department of London was formed. 
In 1862, owing principally to the growing expenditure, the offices determined 
to give up the establishment, but offered to transfer it on liberal terms to any 
authority the constitution of which should be approved by the government 
and the companies. Eventually the companies transferred free of charge, to 
the Metropolitan Board of Works, the whole of the property, further agree- 
ing to contribute annually a sum equal to £35 per million on sums insured 
within the metropolitan area, estimated to yield £10,000, the treasury to con- 
tribute £10,000, and a metropolitan rate to provide £30,000, £50,000 in all. 
In 1865, this became law, and with some few modifications is still in force. 

But to pass to the present time of electric and steam fire apparatus and the 
Holly system of distributing water. 

The department and water supply of San Francisco was so fully discussed 
last year in the daily papers, that it would be useless for me to go over the 
ground afresh. 

In regard to the smaller country towns in California, it seems to me as if 
we were apt to pay too much attention in making our rates to the fact of a 
town having a fire department, or not having one. Although I should be 
loth to say anything to discourage protection, yet it w T ould almost appear 
from our losses that a more just way would be to take the previous record 
of the town — if it is old enough to have one — to calculate our rates on. 
For instance, take our coast towns, Ventura, San Diego, Hueneme, Lompoc, 
Monterey, Santa Monica, where they have little or no protection, and com- 
pare them with most of our inland towns that we consider have fair depart- 
ments, as Merced, Modesto, Visalia and Bakersfield, and what company 
would not be willing to write on risk in the former at far lower rates than 
in such as the latter towns, although rather the reverse appears to be the 

Of course, the record of a town shows the general moral hazard — that 
quantity that we all find so difficult to estimate. 

We know that the main reason why country departments, as a rule, are so 
inefficient is because they do not get enough practice, and the members too 


often join in order to waive jury duty, and are not to be calculated on in 

time of need. 


On behalf of the Committee. 

The President — Next on the programme will be the report of 
the Library Committee, and as Mr. Spencer, the Chairman, is 
not here, we will have to pass that order and close the pro- 
gramme of this annual session. 

Mr. R. V. Watt — I rise to a question of privilege. During 
yesterday's session there was a paper read from the Knapsack, 
signed lt Questioner." It was objected to in very strong and 
unkind language, and I thought it better at that time to allow the 
matter to be thoroughly discussed without anything being known 
about its author, and the impressions which the reading 
of it has given rise to might be removed. But these unkind 
things hayjng been said, and I being the culprit, I feel that I 
ought to be granted the privilege to reply in a few remarks to 
the expressions which I consider were unjust. Have I that 
privilege ? 

The President — I do not suppose there are any objections. 

Mr. Fenn — I move that the privilege be granted. 

Mr. Wetzlar — I second the motion. 

The motion being put to a vote, it was declared carried, and 
privilege extended to Mr. Watt. 

Mr. Watt— The first remark which I wish to call attention to 
and refute was the one which charged the article with being 
malicious. To meet that, I can only explain how it happened to 
be written. I have read very carefully all the published reports 
upon the workings of the Compact system, and the speeches 
made at Sacramento. I read the journal of the commissioners 
and the Coast Review, and became very much interested indeed, 
in this subject of insurance legislation and the argument that 
was frequently made, that the Compact was necessary for the 
advantage of the public. That it was a great public good and 


benefit. I began to figure, taking my figures from the Coast 
Review and the Review. 

As I figured I became more and more interested, until I com- 
piled the paper which was read here yesterday. I read it over 
to one or two gentlemen in the insurance business and asked them 
if it was objectionable. I felt a little doubtful about it being ac- 
ceptable, and asked them whether there was any objection to pub- 
lishing it. They one and all said, " No, read it, send it in." I sent 
it to Mr. Grant, the editor of the Knapsack, and stated to him as I 
have stated, that I felt a little objection to reading it in this 
Association ; I told him that I was not thin-skinned, and if on 
reading it, he found it would be better to keep it out of the 
Knapsack, to send it back to me. He thanked me for sending it 
and said he had requested papers from members of the Associa- 
tion, and unless I heard from him to the contrary, it would be 
read. I heard nothing more about it until I heard it read here 
yesterday afternoon. 

There was not a particle of malice, in any shape, manner or 
form, in that paper, and no such thought was suggested until it 
was charged here yesterday afternoon. 

Then as to the figures. By one gentleman, I believe, it was 
said that the figures were misleading, and by another, that they 
were false. I do not care to go over the figures again, because 
they are correct, and I invite your attention to them when they 
are printed, so that you can have them before you. In fact, the 
article on statistics, presented this afternoon, bore out all that I 
have said. 

The next question discussed, was, as to whether it would do 
any harm. If true, it can do no harm. It was asked why I 
had confined myself to the State of California, alone. I simply 
state that it is in keeping with the figures presented to the Cali- 
fornia Legislature, and I say there is not a man within this 
room who has been, or thinks of going east to induce a company 
to come here, that has not, or will not use the argument that 
California has proved a profitable field for insurance companies. 
Anyone who has visited the east for the purpose of obtaining an 
insurance company, I doubt not, but carried with him the same 
figures that I prese nted yesterday. If not, I do not know what 
he would say. 


Now, as to the rates being reduced, that was called into atten- 
tion. I think that needs no answer, simply because the figures 
bear me out in the assertion that the rates were largely 
advanced, that is, eleven per cent, over what they were before. 
I did state in that paper that the rates had no doubt been equal- 
ized, and some risks raised and some decreased, but that the rates 
generally have not been decreased, and they have not been. I 
do not need to carry that out in argument, because it can be 
shown from figures, and by your own experience. Eyeryone of 
you know that. Then I referred to the " Compact/' by ques- 
tions. And I wish to say that in many of those cases the inter- 
rogatories were put to awaken thought as to the manner in which 
this Compact might be strengthened and made useful in its 
functions. I called attention to some of its weaknesses. 

It has been suggested that it was unseemly for a subordinate 
to criticise the acts of his superiors. This meeting is especially 
for the young men, not for the ministerial officers. Few among 
the managers belong to this Association. It was with the idea 
of talking it among ourselves as to whether the Compact has 
accomplished all these facts. There is only one thing that I ask 
in that paper that I at all regret, that is where I ask if it was 
true that the management was not able to enforce all the rules 
of the Compact because some of the members to it said they 
would withdraw in case they were compelled to comply. I 
asked that question, but I rather regret the asking of it. But it 
came from this, that it has been stated to me repeatedly, not only 
by members of the Pacific Insurance Union, but by other offi- 
cers, that certain members of the Pacific Insurance Union had 
said on the floor, that they proposed to obey the rule of the 
commissioners so far as it suited them, but beyond that, they 
would not obey, and if the Pacific Union did not like it, they 
could put them out. That has been stated to me time and time 
again, and that is the reason I ask that question. 

I had no idea, gentlemen, of stirring up the hornet's nest that 
was raised here yesterday afternoon. I believe in the Compact. 
I think it is a good thing. But I do not think it goes far 
enough, and my idea was to point out some of the weaknesses in 
the Compact of the Pacific Insurance Union. Others have made 


to me the same comment that I incorporated in that paper, and 
since yesterday a half a dozen have spoken to me, insisting that 
the thing is so. 

Why not remedy these faults rather than deride the man that 
points them out. I feel that to make it successful, the Pacific 
Insurance Union must spend a dollar for every twenty-five cents- 
it now expends, to do this work. 

I had not any idea of saying anything that would interfere with 
or injure the business in which I am engaged for life, so far as I 
know, and only to profit somewhat by showing the weakness 
which we subordinates have heard of from all sides, and which 
the general agent may have overlooked. 

One more point and then I have done. In half a dozen papers 
that have been read, references have been made to unfair prac- 
tices, exceptional rates of commission, and all that sort of thing, 
showing that it is understood that it is common practice, and as 
one of the speakers stated, the writer of this paper must have 
been outside in the field, and have come across the arguments 
that are therein made. 

Mr. Mel — It may not have been noticed, but I made use of 
of the word "malice/' in speaking against the introduction of 
this paper. Now knowing that it was Mr. Watt who was the 
author of the paper, I gladly withdraw the word " malice," 
because I know he would not do anything in malice. 

The President — I ani very glad to know the origin of the 
paper so far as I am personally concerned. There being noth- 
ing further, we will postpone the matter until the report of the 
committee, to whom the paper has been referred. 

I think we are under great obligations to our friend, Mr. 
Grant, for the Knapsack, and his judgment in the matter of 
admitting articles for publication should not be circumscribed. 

Mr. Fenn — At this moment, and coming I think in perfect 
order, it is the place for us to express our thanks to the editor. Ac- 
cording to my appreciation, it is the best Knapsack we have ever 
had, and the thanks of the Association are due to Mr. Grant for the 


time and ability he has devoted to it, and I make a motion that 
the thanks of the Association be tendered to Mr. Grant. 

Mr. Gunnison — I second the motion. 

The motion being put before the meeting, the same was unan- 
imously carried, and was followed by calls for " Grant." 

Mr. Geo. F. Grant — I thank you very much for your kind 
"expression of opinion. The editor of the Knapsack, or any one 
of these gentlemen who write for you a paper for your enter- 
tainment at your annual meeting, do what we consider our 
duty under the rules of our Association, as we understand them. 
As you have expressed by your vote, you have confidence in 
me, and believe I put in the Knapsack such articles only as are 
for your entertainment. This particular paper, I am sure, has 
been very entertaining for a number of hours. It has given 
you an opportunity to rise and express yourselves on both sides 
of the question at the same time, and that is a great deal. The in- 
troduction of that paper, in itself, was innocent enough. It was 
Intended, as the gentleman has explained, and which I believed 
to be the case at the time, simply an expression of opinion. He 
is one of one hundred and odd men members of this Association. 
He has a right to express, in a decent and becoming way, his 
opinion upon any subject, no matter if he may be the only per- 
son in the Association who entertains those views. That is why 
that paper went into the Knapsack. And without wishing to dis- 
cuss a question that has been settled, I will say to you that if 
you will look the Knapsack through, from the first up to the 
present, you will find some of the grandest thoughts and bold- 
est expressions, which have a direct bearing on the business of 
fire insurance, and which were not funny or humorous, and make 
no attempt whatever to be funny or humorous, enclosed within 
the flaps of the Knapsack, and they have done quite as much 
good as any paper that has been contributed by anybody, on 
any subject. 

The President — I see Mr. Spencer in the room. He is Chair- 
man of the Library Committee, and we will be very glad to hear 
from him. 


Mr. Spencer — I regret very much that I have been unable to 
attend the proceedings of the annual meeting, but we have been 
very pressed in the office. Still I do not think matters would 
be complete without a report from the Library Committee. It 
is very brief. It states simply the report of the nuances, and is 
expressed on a very small piece of paper. 

I have very little to say about the library during the past 
year. We have contributed to different insurance publications, 
have kept up our subscription to -them, and the shelves have 
slowly grown in volume. There are one or two suggestions that I 
would make. It is that the periodicals belong to the Associa- 
tion. They sometimes go to one officer and sometimes to 
another, and to no regular officer of the Association, and some 
of them are lost. I will suggest that in future, they be mailed 
to the Chairman of the Library Committee, whoever he may be. 

Mr. Sexton is my associate upon the Library Committee, and I 
shall be very glad to hear anything he may have to sa}\ 

Mr. Sexton — I have no report to make. I have not seen any 
of the money, 

The President — That completes the programme as published. 

Tne next thing in the order of business, is the election of offi- 
cers for the ensuing year. Before proceeding with that I wish 
to thank you gentlemen for your kindness to, and patience with 
me ; and also the gentlemen of the press, for their courtesies. 

Mr. Dornin — I nominate Mr. J. W. Staples for President. 

Mr. Meade— I second the motion. 

The same being put to a vote, it was declared unanimously 

Upon a vote being taken, it was declared carried, and the act- 
ing Secretary thereupon cast the vote for Mr. J. W. Staples for 
President for the ensuing year, and thereupon the Chair de- 
clared him duly elected. 

President Clark — Mr. Staples, will you take the chair. 


President Staples — I would rather you would occupy it for 
the remainder of the meeting. 

The President — The next nomination in order will be for 
Vice President for the ensuing year. 

Mr. Fenn — I take great pleasure in placing in nomination a 
gentleman who has been a member of this Association almost 
from its inception ; one whom we all know ; one who has 
declined the same position before, and when I broached the 
subject to him a few moments ago, still declined. I refer to Mr. 
W. L. Chalmers ; a man who is second to noue in the business, 
and in bringing his name before you I trust you will consider 
what is properly due to his experience and earnestness. 

Mr. Watt — I second the nomination. 

The nominations being declared closed, on motion of Mr. 
Watt, the Secretary was directed to cast the ballot for Mr. Chal- 
mers for Vice President. 

The Secretary cast the ballot as directed, and the President 
thereupon declared Mr. W. L. Chalmers elected as Vice Presi- 
dent for the ensuing year. 

The President — The next in order are the nominations for 

Mr. Wetzlar — I am sorry to say that our former Secretary, 
Mr. Naunton, who is unfortunately ill at home, has positively 
declined to further fill the position, on account of his urgent 
duties which he has to perform. Under the circumstances, I am 
glad to place in nomination for the position of Secretary of this 
Association, a gentleman who is eminently gifted for the posi- 
tion, and who will have spare time to perform the duties satis- 
factorily to himself and to the credit of this Association. I 
desire to nominate for that office, Mr. Bernard Faymonville. 

Nominations being closed, the Secretary was directed to cast 
the ballot for Mr. Faymonville for the ensuing year as Secretary, 
and that the acting Secretary cast the ballot as directed, and the 


Chair thereupon declared Mr. B. Faymonville duly elected Sec- 
retary for the ensuing year. 

The President — The next in order is the election of an Execu- 
tive Committee. 

I move that the members of the old Executive Committee, H. 
K. Belden, Geo. F. Ashton and Calvert Meade, be elected the 
Executive Committee. 

The motion being seconded and nominations closed, Mr. 
Staples moved that the Secretary cast the ballot for the gentle- 
men named. The ballot being cast by the Secretary, the Presi- 
dent thereupon declared H. K. Belden, Geo. F. Ashton and 
Calvert Meade duly elected the Executive Committee for the 
ensuing year. 

Mr. Chalmers — I now move that we adjourn. 

Mr. Faymonville — I second the motion. 

The same being put to a vote, it was declared carried, and the 
eleventh annual meeting was adjourned. 


The Annual Banquet at the Maison Doree, on the evening of the 16th, was 
attended by forty or fifty members of the Association, including guests. The 
usual good time was had which has characterized these Annual Reunions, by 
discussing an excellent menu, and toasts, speeches, songs, etc. 

The principal after-dinner speech was that of Mr. John Scott Wilson, who 
in reply to the "Collegians in the Profession," spoke as follows: 

Mr. President — The occasion we celebrate to-night is one filled with 
special and peculiar interest. It is that we may, with song and story, make 
a circuit of the festive board, and fill up the chasms of life with mirth and 
J aughter. To feel that buoyancy of spirit which drowns all care and draws 
each into closer relationship with his brother; for our lives to receive fresh 
impulse from the hopes which brighten and the friendships which are here 
formed. Hither we have come to tell the old stories, to sing the old songs. 
to renew the old traditions, and to add another bright page to the pleasures 
of the past. How peculiar, then, the delight, how generous the interest 
enkindled within us as we gather this evening, many hearts beating with 


one purpose and uplifted in one devotion. No fabled dragon in terrible 
aspect, as in the elder time, watches at the gates of this garden of Hesperides, 
less the foot of the profane should desecrate its fragrant walks, or his pre- • 
sumptuous hand dare pluck the ripening fruit, a mightier than Hercules — 
the spirit of genial fellowship — has slain the dragon, and thrown open the 
portals of its sacred recesses; and now the barbarian, as w< 11 as the Greek, 
may enter and eat of those fruits at will. All are welcome, for we meet to 
the feast of youth, of friendship and of fraternity. 

Man is, in the nature of things, a social being; he loves to frequent the 
society and enjoy the affections of those who are like himself, therefore we 
can wonder at the entire neglect of the finer feelings of our nature, the 
social for instance, which mark the character of multitudes of the genus 
homo, in this our day. Deeply engrossed by their strife after the pelf and 
and lucre of Mammon, they serve him, therefore, with such perfect, such 
unmingled devotion, that no time is left nor opportunity given for converse 
with each other, otherwise than in the crowded mart of commerce, the shop 
and the stall. 

From early dawn until the very going down of the sun, and even into the 
still hours of the night, every thought, word and deed is devoted to the wor- 
ship of that denr'god who rewards his votaries with great stores of gold, 
and at the same time with bitterness and ashes. Even their sleep is troubled ; 
their dreams are not of the bright realms of sylph and fairy, but of those 
dark and gloomy caves in the bowels of the earth where hideous and gigantic 
genii sleeplessly watch over the ingot and the jewel — the heaped-up treasure 
of their sordid master. 

Upon the brows of such sits wrinkled care, while in their hearts is sharp 
anxiety, brooding over the unattained object of their fierce desire. Their 
converse is but of cent per cent, of "profit and loss," and of loaded argosies. 
They tremble from very fear as they hear the fierce winter's wind howling 
around their homes, and when they meet each other " on change," scarcely 
have the usual salutations of the day curtly passed between them, ere their 
troubled thoughts find utterance in solemn talk upon the dreadful storm of 
yesternight, and their own rich ventures and those of their fellows, for friends 
they have none, though they may name them such. There is no time to 
enjoy nature's beauties; no leisure hours to spend with those grand old 
masters of English literature; none for social duties; no time to pray. 

" How quickly nature falls into revolt 
When gold becomes her object." 

B-echer in his " Life Thoughts " says: ■• Many men are mere warehouses 
full of merchandise — the head — the heart— are stuffed with goods. * 
There are apartments in their souls which were once tenanted by taste and 
love, by joy and worship, but they are all deserted now, and their rooms are 
filled with earthly and material things." But who is this Diety — Mammon^ 
that man so worships ? Indeed its power is great; it transforms the beggar 


into the aristocrat, clothes the bandit with respect, makes the outlaw a citizen, 
and bequeaths to him the name of Christian. It is a jnstifier of wrongs 
and a repulsion to truth, an idol who-e worship is almost universal, the pos- 
session of which is sought with the utmost zeal to the exclusion of pursuits 
more worthy. Fame and wealth are indeed great rewards, but they should 
not be the entire aim and end of man. 

Alas ! they oftimes come too late. Fame when the laurel wreath crowns 
a head white with the snow of age; wealth, when disease prevents the gratifi- 
cation of even innocent desires; happiness, when death is at the threshold, 
when riches are the only fruits of fifty years of toil and labor to the exclu- 
sion of higher and happier ends. If you succeed your reward is 

" Praise— when the ear has grown too dull to hear, 
Gold— when the senses it should please are dead; 
Wreaths — when the hair they cover has grown gray, 
Fame — when the heart it should have thrilled is numb. 
And close behind comes death, and ere we know 
That even these unavailing gifts are ours, 
He send us stripped and naked to the grave." 

Forbid that it should be said that there are no brilliant exceptions -those 
who say to their worldly affairs c: thus far and no farther," who cultivate the 
finer feelings of their nature and glean from the rich fields of literature 
precious products, and are guided by the light of moral principle; who see in 
each rounded pebble, little leif and tiny blade of grass, as well as in the 
jutting rocks, the majestic tree and meadows carpeted with verdure, the hiding 
place of God 2 s power. For what were our feelings of consociality so liberally 
bestowed upon us by the wise author of our existence, if not as pure sources, 
of enjoyment, if not to adorn aud beautify life. 

Oh ! ye who waste the best and brightest hours of that life in carking 
cares and material pursuits, little know ye how you lose and throw away 
that time which might be made so fruitful of the truest and most exalted 
happiness. Eager for gain, looking forward to a period which never comes,, 
ever anticipating and never realizing, before you are aware the evil days- 
come when you have no pleasure in them. First — Go with me to the house 
of a friend who can sympathize with my taste and feelings. Second— Go 
with me into your library where are enshrined the souls of the living dead,, 
and let us commune with them for a moment. There you have Milton to 
sing to you of paradise; Sh ikespeare to open to you ths worlds of imagina- 
tion and the workings of the human heart; Franklin to enrich you with his 
practical wisdom, and Bacon to teach you his deductive philosophy. There 
you meet the gentle loving Spencer, characterized by Hallam, as " the delight 
of every accomplished gentleman, the model of every poet, the solace of 
every scholar." 

There you meet in true friendship poet, historian and novelist How 
could you better pass your time ? You pick up the poets' pages and there 
you find brilliancy of fancy to captivate, creations of genius to surprise, ten- 

144 FIRE underwriters' association. 

derness of conception to raise us above every da} 7 life, all embodied in beau- 
tiful and harmonious language. His is the master mind that sweeps among 
the trembling chords of our hidden and mysterious nature, and wakes the 
dim melodies we dream w r e have heard before the present, in some other 
world— that shadowy memory of some more beautiful existence, which 
dwells in every soul. 

Then you commune with men like Dickens and Thackeray, men full of 
human love and hope and charity, whose works and lives are but one long 
poem, wherein all may hope for comfort and sympathy. Here is an honest, 
and theiefore beautiful sentiment towards mankind, in its highest and lowest 
grades, a broad, universal and catholic f iith, that includes in its creed the 
love of all, even the saddest and most degraded of our hum m kind. Theirs 
are the works which bear the stamp of heaven on the broad page, whereon 
they trace hopeful words to their fallen and deserted brother. 

The field of literature is a province wherein have labored the greatest and 
best of earth's gifted ones; wherein have toiled philosophers and poets; men 
of science and earnest inquiry; men whose midn ; ght visions have been lit 
with a strange and mystic light; men whose great and superior intellects 
have, Columbus like, explored untraversed seas of thought, and brought 
back wonderful treasures from lands else unknown. 

Yet our bond is not that of scholarship or literature. If we still love 
literature, if we still cherish the sweet sympathy of scholarship, it is that 
their true purpose may be fulfilled, that like squires and henchmen they 
may burnish the armor as bright as gold, and tip the spear with diamond 
lustre, for which we are to do our part in the great good fight for human wel- 
fare; they are the means to ends. Ours is an age that demands songs for 
the army of pilgrims to the arts, the sciences, the mechanical — songs of 
labor, of sympathy, of hope; songs that hearing, the mighty heart of the 
great working nations may gather fresh strength and vigor for their daily and 
weary way onward; songs that shall nerve the sinking heart and give brok n 
gleams of eternal summer. We should, therefore, cultivate literature and a 
love for books. It gives to us the precious thoughts of our own generation, 
and the brilliant minds that have gone before us. It enlarges the intellect, 
improves the understanding, allays and soothes the passions, but above all 
these it emplants in the heart of man the true principle of universal 
brotherhood. Where else, save in the rare communion of friends, are hours 
so short and moments so swift? Where else, save in their tried friendship, do 
we awake from pleasure into surprise that whole hours are gone which we 
thought had just begun; blossomed and dropped which we thought had just 

As each succeeding year is added to the calendar of the past, let it eve 
our pleasure to meet together and keep this feast of genial fellowsh ; p. not 
forgetting that 

51 Great souls by instinct to each other tnrn. 
Demand alliance, and in friend-hip burn. ' 



F. S. Angus, Assistant Manager, Anejlo-Nevada. 

Geo. F. Ashtou, Special Agent, Union Insurance Company. 

L. L. Bromwell, President, California Insurance Company, and General 

Agent Union Insurance Company, of New Zealand. 
E. Brown, General Agent, Phoenix, American, Pennsylvania, and the State 

of Pennsylvania Insurance Companies. 
A. J. Bryant, President, State Investment and Insurance Company. 
J. D. Bailey, Secretary, Union Insurance Company. 
Geo. E. Butler, General Agent, S. F. Agency Phcenix Assurance Company of 

London, Western Assurance Company of Canada, and American Fire 

of New York. 
H. K. Belden, Manager, Hartford Fire Insurance Company. 
D. M. Bokee, Special Agent aud Adjuster, withT. A. Mitchell's Agency. 
Geo. W. Burns, Special .Agent and Adjuster, with iEtna Insurance Company. 

D. B. Bush, Jr., Resident Agent, Home Mutual Insurance Company at Port- 

land, Or. 
Z. P. Clark, General Ageut, Commercial Union Assurance Company. 
W. J. Callingham, General Agent, City of London Insurance Company. 
W. L. Chalmers, Associate Manager, Fire Insurance Association of London. 

E. W. Carpenter, General Agent, Royal, Norwich Union & Lancashire In- 

surance Companies. 

J. W. G. Cofran, Manager, Hartford Fire Insurance Company. 

Chas. H. dishing, Secretary, State Investment and Insurance Company. 

O. H. Cole, Adjuster, Portland, Oregon. 

Homer A. Craig, General Agent, Brown, Craig & Company. 

T. J. Conroy, Assistant Manager, with Pacific Insurance Union. 

Robert Dickson, Manager, London, Northern, Queen and Connecticut In- 
surance Companies. 

Geo. D. Dornin, Manager, Imperial, Lion, Orient and Washington Fire In- 
surance Companies. 

Geo. W. Dornin, with Imperial, Lion, Orient and Washington Fire Insur- 
ance Companies. 

A. C. Donnell, City Agent, California Insurance Company. 

Henry Dobinson, General Agent, Oakland, Cal. 

W. S. Davis, City Agent, with Brown, Craig & Co. 

Jas. H. DeVeuve, Special Agent, with Jacobs & Easton. 

William J. Dutton, Secretary, Firemans Fund Insurance Company. 

V. C. Driffield, Special Agent, Anglo-Nevada Assurance Company. 


Geo. Eastern, General Agent, Jacobs & Easton Agency. 

L. B. Edwards, Special Agent and Adjuster, with Balfour, Guthrie & Co.'s 

C. P. Ferry, Adjuster, with Sun Insurance Company of San Francisco. 

Wm. Frank, General Agent, Hamburg-Magdeburg and Germania Fire, Mag- 
deburg Fire and Magdeburg General Insurance Companies. 

Ed. P. Farnsworth, Special Agent, Hutchinson & Mann's Agency. 

Bernard Faymonville, Kesident Special Agent, Firemans Fund Insurance 

Thos. W. Fenn, Adjuster, San Francisco. 

Charles P. Farnfield, Secretary, Anglo-Nevada Assurance Corporation. 

Geo. F. Grant, Assistant Manager, North British &■ Mercantile & German- 
American Insurance Companies. 

A. K. Gunnison, General Agent and Adjuster, Commercial Insurance Co. 

T. C. Grant, Manager, North British & Mercantile and German-American 
Insurance Companies. 

A. B. Gurrey, Special Agent, London, Northern, Queen and Connecticut In- 
surance Companies. 

H. M. Grant, Special Agent, with Balfour, Guthrie & Co. 

J. F. Houghton, President Home Mutual Insurance Company. 

Oliver Hawes, General Agent, Bowery & Howard Insurance Companies. 

Chas. D. Haven, Kesident Secretary, The Liverpool <fc London & Globe In- 
surance Company. 

Rudolph Herrold, General Agent, Hamburg-Bremen and Niagara Insurance 

E. A. Halsey, with Messrs. Hutchinson & Mann. 

O. N. Hall, Special Agent, with Scottish Union <fc National & National In- 
surance Companies. 

W. F. Herrick, Adjuster, Commercial Insurance Company of California. 

Walter H. Holmes, Special Agent, Phoenix <teHome Insurance Companies. 

E. B. Haldan, General Agent, Phoenix of London, Western of Toronto and 

American Fire of New York, Insurance Companies. 

F. T. Hoyt, San Francisco. 

Wm. Greer Harrison, General Agent, Thames & Mersey Marine Insurance 

J R. Hillman, Manager, Southern California Insurance Company. 
S. D. Ives, S ecial Agent, Firemans Fund Insurance Company. 
Julius Jacobs, General Agent, Jacobs & Easton Agency. 
J. C. Jennings, General Agen^, New Hampshire Insurance Company. 
Franz Jacoby, General Agent, Prussian National Insurance Company. 
C. Mason Kinne, Special Agent and Adjuster, The Liverpool & London & 

Globe Insurance Company. 
John Landers, General Agent, Manhattan Life Insurance Company. 
W. J. Landers, Manager, Guardian Assurance Company. 
J. A. Lawrence, Special Agent, Jacobs & Easton's Agency. 


Richard Lockey, Adjuster, Helena, Montana. 

Wm. H. Lowden, Adjuster, North British & Mercantile and German- Ameri- 
can Insurance Companies. 

J. W. Maillard, Insurance. 

J. D. Maxwell, Insurance. 

T. L. Miller, Insurance. 

Calvert Meade, Special Agent and Adjuster, City of London Fire Insurance 

H. R. Mann, General Agent, Hutchinson & Mann's Agency. 

D. E. Miles, Secretary, Southern California. 
Geo. M. Mitchell, City Agent, New Zealand. 

T. A. Mitchell, General Agent, Insurance Company of North America. 

Geo. Mel, Manager, Newhall & Co.'s Agency. 

Louis Mel, Special Agent and Adjuster, Royal, Norwich Union & Lancashire 

Insurance Companies. 
C. B. McHenry, Special Agent, German- American Insurance Company, 
C. F. Mullins, Manager, Commercial Union Assurance Company. 
Ed. C. Morrison, Special Agent, State Investment & Insurance Company. 
C. E. Moody, Insurance, 

I. Manheim, General Agent, Scottish Union & National, and National of 

Hartford, Insurance Companies. 

C. M. Nichols, Assistant Manager, Pacific Insurance Union. 

R. H. Naunton, Assistant Manager, Scottish Union & National, and Na- 
tional Fire and Providence Washington Insurance Companies. 
Paul M. Nippert, Special Agent, Phoenix & Home Insurance Companies. 

E. E. Potter, Secretary and Treasurer, Sun Insurance Company of Califor- 

nia, and General Agent, Williamsburg City Insurance Company. 
T. E. Pope, Assistant General Agent, iEtna Insurance Company. 
Geo. C. Pratt, Special Agent, California Insurance Company. 
J. B. Richardson, Insurance. 

S. B. Riggen, Special Agent and Adjuster, Portland, Oregon. 
R. S. Robbins, Insurance. 
Wm. Sexton, Assistant Manager, Imperial, Lion, Orient and Washington 

Fire Insurance Companies. 
A. D. Smith, Insurance. 

II. Bronson Smith, Special Agent, Union Insurance Company. 

Geo. W. Spencer, Manager, London & Lancashire, Manchester, Continental, 

Caledonian and American Insurance Companies. 
J. W. Staples, Manager, Scottish Union & National and National Fire and 

Providence Washington Insurance Companies. 
H. W. Snow, Insurance. 
A. A. Snyder, Insurance appraiser. 

Chas. R. Story, Secretary Home Mutual Insurance Company. 
Amos. F. Sewell, Insurance. 

D. J. Staples, President, Firemans Fund Insurance Company. 

148 FIRE underwriters' association. 

Alfred Stillmau, Manager, Pacific Insurance Union, San Francisco. 

S. E. Strickland, Fire Insurance Adjuster. 

G. Tou chard, President Union Insurance Company of California. 

J. M. Thompson Special Agent, New York Underwriters' Agency. 

W. P. Thomas, Superintendent of Agencies, South British Insurance Com- 

J. Scott Wilson, General Agent, Hutchinson & Mann. 

D. B. Wilson, Special Agent, with Brown, Craig & Co.'s Agency. 

G. W. Wickes, Insurance. 

A. J. Wetzlar, Fire Insurance Adjuster. 

R. V. Watt, General Agent, American Central Insurance Company. 

H. B. Wheaton, Insurance. 

Frank W. Young, Special Agent, Lion, Orient & Washington Insurance 


W. J. Broderick, Insurance Agent, Los Angeles. 

V\. W. Dudley, Illinois State Agent, German-American Insurance Company. 

J. G. Edwards, Editor Coast Review, 320 Sansome Street, San Francisco. 

C. C. Hine, Editor Insurance Monitor, New York. 

€. T. Hopkins, late President California Insurance Company, and General 
Agent Union Insurance Company of New Zealand. 

A. Hill Jack, General Manager, National Fire & Marine Insurance Company 

of New Zealand. 

D. L. Kirby, Associate Manager, Royal Canadian Insurance Company. 

B. B. Lee, Insurance Agent, Red Bluff. 

G. F. McLellan, Insurance Agent, Los Angeles. 

W. N. Olmstead, 62 Cedar Street, Room 10, New York City. 

Peter Winne, Insurance Agent, Denver, Col. 

pire Underwriters Association of tpe I acific 


J. W. STAPLES President. 

W. L. CHALMERS Vice-President. 





Local Agents. 

Forms of Policies. 

Losses and Adjustments. 

Legislation and Taxation. 

Fire Department and Water Supply. 




Editor Knapsack, ----- E. W. CARPENTER. 


A separate paper is expected from each Committeeman, and it is suggested 
that the members of the respective Committees meet at once and apportion 
the work, with a view to having the various subjects treated from different 

i.. +ttyiit I ksdoa i Gisie k fit 





lation of tpe I acific. 




ire Jnderuiiiiks' Association of the fjacijii 


J. W. STAPLES ------ President 

W. L. CHALMEKS - - Vice-President 





A. E. GURREY, O. N. HALL, J. H. de VEUVE. 














E. W. CARPENTER, Editor. 

P'ire Underwriters Association of tr}e I acific 


Monday, Feb. 20th, 1888. 



B. FAYMONVILLE, Sect'y and Treas 


J. W. STAPLES, President. 


H. K. BELDEN, Chairman. 


O. N. HALL, 






E. W. CARPENTER, Editor. 

J. H. de VEUVE. 

Tuesday, February 21st. 


H. R. MANN, 














T. W. FENN. 






T. E. POPE. 

Fire Underwriters' Association. 

Conforming to the custom and the By-Laws, and in ac- 
cordance with the notice of the President, the regular An- 
nual Meeting of the Fire Underwriters' Association of the 
Pacific was opened at 1:30 p. M., on this, the 20th day of 
February, 1888. 

There were noted as being present during the sessions, 
the following members and visitors : 

Geo. F. Ashton, Geo. C. Pratt, 

H. K. Belden, A. D. Smith, 

W. L. Chalmers, J. W. Staples, 

J. W. G. Cofran, 
Geo. D. Dornin, 
James H. de Veuve, 

B. Faymonville, 
Geo. F. Grant, 
3. R. Hillman, 

C. Mason Kinne, 
Wm, H. Lowden, 
Calvert Meade, 
C. B. McHenry, 

D. J. Staples, 
Geo. H. Tyson, 
A. J. Wetzlar, 

D. B. Wilson, 
Geo. E. Butler, 
W. J. Callingham, 

E. W. Carpenter, 
H. A. Graig, 
Geo. W. Dornin, 
L. B. Edwards, 

C. P. Farnfield, 
A. R. Gunnison, 
Franz Jacoby, 
Richard Lockey, 
J. D. Maxwell, 
Louis Mel, 
P. M. Nippert, 
Wm. Sexton, 
H. Bronson Smith, 
A. A. Snyder, 
C. P. Stringer, 
J. Scott Wilson, 
Rolla V. Watt. 

Honorary Member — J. G. Edwards. 

Visitors — Harry H. Bigelow, Geo. Boos, Helena, Mont. ; Philip 
Gibson, Great Falls, Mont.; Mr, Wilson, Chicago; Mr. Ward, 
Los Angeles; Mr. Bellersheim, Iowa. 

The President called the meeting to order, reminding the 
members of the purposes of the gathering. 

He then announced that the proceedings would be begun 
with a report from the Secretary and Treasurer, Mr. Ber- 
nard Faymonville. 

These reports were then read, and were as follows: 



Mr. President and Gentlemen — I beg to transmit herewith my report of 
the business and transactions of the Association for the past year. 

Immediately after the annual meeting of 1887 the Association consisted of 
one hundred and ten active members and eleven honorary members. Dur- 
iug the year 1887 there were admitted ten new active members, making one 
hundred and twenty in all. During the same period the active list has been 
reduced in various ways as follows: 

Resigned 8 

Died 2 

Stricken off the roll on account of ineligibility 3 

Dropped for non-payment of dues 7 

Transferred to honorary list 2 

Total 22 

Leaving the active membership of the Association at this date ninety-eight, 
and the honorary membership thirteen. 

During the year we were called on to mourn the death of our brother 
members G. W. Burns and J. M. Thompson, the death of both of these gen- 
tlemen occurring under painful and distressing circumstances. 

I would suggest that the members keep the Secretary advised of their ad- 
dresses in future, as notices of meetings and other documents are frequently 
missent through no fault of that official. 

The meetings during the year, while not as fully attended as their nature 
merited, were nevertheless of much interest to all present. 

Thanking the members, one and all, for the many courtesies extended me 
as Secretary during the past year, I am, 

Very respectfully, yours, 




On hand February 15th, 1887 $11 53 

Received in 1887 for Dues 266 00 

4< " Special assessment 103 00 

* * " Admission fees 55 00 

Sale of Proceedings 12 00 

" from Library Fund for money advanced 18 00 

11 deposits for badges 65 to 75, inclusive 27 50 

deposit on badge No. 22 2 50 

$495 53 



Stationery $10 £0 

Balance of Dinner Committee. 50 00 

R. H. Naunton, Secretary's s il try. 50 00 

Printing 235 50 

Copying 1 00 

Insurtnce 5 40 

Periodicals 12 60 

Postage and delivery . 16 55 

Twelve new badges 25 50 

Old badges redeemed ( seven) 17 50 

Funeral expenses t 30 00 

Dues returned to members 2 50 

Reporting annual proceedings 32 50 

$489 95 

Balance on han 1 $5 58 

Respectfully submitted. 


Approved February 15, 1888. 

Executive Committee. 

Mr. Faymonville — I will also state, that during the year 
there was handed me a book, which on the outside bears a 
label indicating that it is the Cash-book of the Library As- 
sociation; there was also handed me by Mr. Naunton a 
package containing $77.35. I suppose that that is the balance 
in the Library Fund. I do not know whether it is the Sec- 
retary's business to hold possession of this or not, but at 
all events if the Library Committee want it, they can have 
it at any time. 

The President — Gentlemen, you have heard the report of 
the Secretary and Treasurer. As a matter of figures it is 
interesting reading. It brings the matter down to a small 
balance of $5.58, showing that we are a solvent concern, to 
say the least; but I think we ought to have a little more in 
our treasury, and I hope the Executive Committee in their 
report will make a recommendation to cover this suggestion. 


Gentlemen, I will say further, that it has been customary 
in days gone by, to recognize the services of the Secretary 
in some way, and I hope that a motion to that end will be 

Mr. George Grant — I move that the usual course be taken, 
and that the sum of $50 be appropriated for that purpose. 

The motion having been duly seconded, was put to the 
meeting and unanimously carried. 

The President — Well, gentlemen, by your votes you have 
bankrupted this concern, and brought it largely in debt at 
the same time. 

Mr. George Grant — If this is the proper time to make 
such a statement, I think, Mr. President, that the beauty 
of this Association in regard to its finances is, that we never 
have any money on hand for any other purposes than the 
printing of our Annual Proceedings and such small sums as 
will carry us on from year to year. I do not think we have 
any use for a balance on hand. Our assessment is low 
and we appear to want to keep it so; it is just enough to 
cover the running expenses of the year, and although the 
President suggested that this should be remedied, I think 
it better if we allow it to remain as it is. If we find we want 
more money we can have it, and if we have a surplus we 
will always find a use for it. 

The President — The remarks of Mr. Grant are quite in 
order, and are fully appreciated by myself; but the object 
of my making those remarks was to bring ourselves out of 
debt, so we would have enough to pay our Secretary $50, 
and not let it lap over into another year. 

The Secretary then presented to the Association George 
Boos, Esq., of Helena, Montana, and Philip Gibson, Esq., 
of Great Falls, Montana. 

The President — On behalf of the Fire Underwriters' As- 


sociation of the Pacific, we bid you welcome. Now, gentle- 
men, I will read my report. 

The President then read his Armual Report, which was 
as follows : 


To the Members of the Fire Underwritkrs' Association of the Pa- 
cific— Gentlemen: This is the Twelfth Annual Meeting since the Fire Un- 
derwriters' Association of the Pacific iirst met, which was on the 23d day 
of February, 1876, in the old Board of Fire Underwriters' rooms, over the 
Union Insurance Co. Those who constituted the assembly on that occa- 
sion were Messrs. B. F. Lowe, H. H. Bigelow, L. L. Bromwell, R. H. Magill, 
Wm. Doolan, J. W. Hart, Geo. F. Grant, Geo. W. Spencer, A. D. Smith, 
Wm. Sexton, E. T. Barnes, B. C. Dick, Z. P. Clark and J. W. Staples. 
The meeting organized and elected as its first officers B. F. Lowe as presi- 
dent, H. H. Bigelow as vice-president and J. W. Staples as secretary; the 
executive committee consisting of Messrs. L. L. Bromwell, J. B. Garni»s 
and Geo. F. Grant. 

The association has been steadily but surely progressing and becoming 
one of the features of the business. Taking a retrospective view, we look 
back to the time when it was with the utmost difficulty that a quorum could 
be collected. Now we can find as many at a monthly as we did then at the 
annual meeting. 

The objects of the association at its inception were clearly defined, as 
being to elevate the professioD, the field men, the special agents and adjust- 
ers, and to place within reach of all of its members the best insurance libra- 
ry on the Coast, and to place in the path of such persons who desired to 
improve themselves the best advantages, such as consultation among his 
fellows. It is this fact that brings to the assistance and conns-1 the best 
men in our business, so that those who wish to avail themselves can get 
good advice and reference by way of progress in his profession. 

At a meeting held April 17, 1877, the suggestion to take up some topic and 
discuss it pro and con was agitated. The first subject chosen was that of 
"Title by Descent," and the following meeting it was presented and dis- 
cussed. This was followed by a couple of others and finally was dropped; 
and it was not until the meeting of April 15, 1879, that Mr. C. T. Hopkins, 
the then president of the association, very earnestly advocated resuming 
the introduction of topics for discussion. This took practical shape at the 
following meeting (May 20, 1879), when a regular order of exercises was 
formulated and adopted, viz. : 

Resolved, That under the head of New Business in the order of business, at the regu- 
lar monthly meetings of the association, the order of business shall be as follows: 
1st. The reading of an essay, to be not less than fifteen minutes nor more than a 


half-hour long, on some topic connected with fire insurance business, to be selected by 
the essayist and announced by him two meetings in advance, or to be assigned him by 
the president, from a list of topics to be kept by the secretary, and so announced two 
meetings in advance; all members to be liable to this duty in rotation, following the 
alphabetical order of their names. Any member expecting to be absent from the meet- 
ing at which he has been appointed to read, shall have the privilege of having his manu- 
script read by another member or by the secretary, or of securing and appointing a sub- 
stitute. In default of his performance, either in person or by a substitute, he shall be 
fined $20, unless excused for good and sufficient reason by the association. 

2d. Immediately following the reading of the essay, the president shall call upon each 
member or guest present to discuss the topic in a speech, not to exceed five minutes, 
until all have been called upon; after which the discussion shall become general. Au- 
thorities may be read by all speakers. 

3d. Any member desiring the discussion of any topic, may hand the same to the secre- 
tary, to be placed upon the list. 

4th. When deemed desirable, the question under debate may be decided by a vote of 
the members present. 

6tb. All manuscripts read at the meetings shall be handed to the secretary and re- 
tained by him as the property of the association, and such manuscript or portions 
thereof may be published as the executive committee shall deem worthy of publication. 

Mr. Hopkins, in presenting the above, stated that he believed if such paper 
were introduced and a full discussion should be provoked, it would result 
in drawing out the best thoughts and thus aid in mutual improvement to 
the members. This scheme was put in full working order and for several 
months worked to a charm. Soon, however, the dry summer months came 
along and the fires increased; the specials and adjusters were out on the 
road, and finally it became a thing of the past. I am resurrecting the sub- 
ject to-day because my successor will want to hav^ a chance to stir the asso- 
ciation up, to infuse new life among its members, and the foregoing is 
thrown out as a good opportunity cf launching out in that direction, and 
possibly we may be able to get out a larger attendance than we have been 
able to do for some time past (except the meeting in which the subject of 
eligibility or members came up, when we had quite a full attendance). 


We have one each, consisting of three members on Local Agents, Losses 
and Adjustments, Forms of Policies.. Legislation and Taxation, Fire Depart- 
ment and Water Supply, Statistics, and Library. 

I would ask when have any of the committees had any questions referred 
to them which they have been asked to pass upon and report to the associa- 
tion? In my judgment the keeping up of the standing committees is not 
called for, and by the doing away with all committees except the executive 
and library committee the association will be positively benefited. I would 
then suggest, in lieu of regular standing committees, that within two months 
after the election of the president that he appoint, say fifteen members, to 
write on certain subjects which may be agreed upon. This would give the 
member say ten months in which to prepare his paper, he would have no 
fellow committeeman upon whom he could shift the responsibility of think- 


ing that bis friend was writing the article, and that he really had no notice 
that he was on any committee, much less that a paper was expected, and a 
string of excuses quite long enough to satisfy any one; but it would fix the 
burden on his shoulders, because the president would start in right, with an 
understanding as to the subject and the man who was to deal with that 

It was my aim in appointing the various committees to make a new deal, 
or as you may say in some of the appointments, by inverse ratio — that is, 
taking some of the older members of the association and some who have not 
seen much field work for some time — in order that we younger men in the 
profession could have the benefit of their many years' experience. I fully 
hope the appointments will be justified and that we shall have much that 
will improve as well as interest us, and of this I am certain, if they will 
only all respond with papers. 

To the field men who represent us in every section of the country is in- 
trusted the responsibility of presenting to the local agent the merits of his 
company, and of instructing him in the various duties of agency work, of 
correcting abuses, of educating the agent and the public as to many features 
in the business which before were entirely new to him; of showing their 
agents the benefit of the compact system; how, by systematic work based 
upon actual fact, the assured is benefited as well as the agent and the 
company; that in risks provided with certain safeguards the Union is able 
to recognize such by reduction of rate, whereas those not so provided are 
obliged to pay more for a greater hazard. The many advantages can be set 
forth, and gradually the public will become the strongest advocates for its 

The field men have a wide range of travel and of thought. Good, con- 
scientious men of this kind can do much good, and it should be the aim of 
every one to work to the end that he can do much toward elevating his 
own position in making it honorable by his efforts. 

Before allowing the subject of the special or field man to pass, there is a 
subject which is a growing evil, and one in which the special can do much 
to correct, and that is extending credits to agents. If by concerted action 
the specials will bring this matter to their principals, and request them in 
the Pacific Insurance Union to pass a rule that no credit shall exceed sixty 
days, and get the general manager to enforce this rale, and they (the spe- 
cials) will go to his agpnt and impress the necessity for the strict observance 
of this rule, they will be doing much good and effect a saving to the com- 
panies of thousands of dollars every year. This feature is one that I believe 
will commend itself at once to every special, and I can almost know it will 
to their principals. 

The sp cial, in his duty of inspecting the risks for his company, should be 
careful to see the same with unprejudiced but professional eyes, be able to 
see the bad features as well as the good, to be able to show his local agent 
the defects in a risk, and convince him, when it becomes necessary to can- 


eel, that it is quite as much to his interest in the way of preventing losses 
as to the company, and after having done that much, to assist the agent to 
get quite as many new risks as had been canceled, thus showing the local 
that the special was working in the joint interest of the agent and the com- 
pany; in the one case wishing to reduce the possible fire h tzard by removing 
as a risk that which had largely the element of a bad physical hazard, and 
of assuming other risks in which the hazard was reduced to a minimum. 
I believe an agent cannot but help appreciating an interest in his behalf in 
this direction, and that the general business will grow by just such judi- 
cious work done by the special agent. Too much cannot be said to encourage 
the special, from the fact that he has so much to contend with. In Califor- 
nia we are beginning to have the railroad in nearly every direction, but it 
was only a few years ago when the older members of this association will 
remember the stage coach, with its four and six horse teams, the mud wagon 
or the buckboard, were the only methods of travel, and when taking a trip 
to Oregon over the Siskiyous, that he who refused to "pack his rail" was 
regarded not only by the driver but the passengers as a " tenderfoot," and 
as for riding in or on the stage (it was usually the mud wagon, not only in 
name but fact), why that was presumptuous and not to be thought of. So, 
plodding along the muddy roads up and down the mountains, the weary 
special took his way, inwardly hoping that the railroad people would hurry 
up and complete the road connecting California and Oregon. Last De- 
cember I had the pleasure of viewing the old stage road over the Siskiyous 
from a Pullman car window, and can assure you that it looked much more 
inviting than when plodding along ahead of a stage. The inconveniences 
in this direction could be told in many ways by bringing up old times, but 
you will remember them — that's enough. In our winter months we have 
the rain, and the special finds it muddy and sloppy. He is not like his 
Eastern brethren, in a country where the small towns are provided with 
paved sidewalks as well as paved streets, but has to encounter mud in 
all degrees, and in summer the same earth is parched and ground to dust so 
fine as to easily find its way through your duster and leave its impress 
plainly upon your clothing; and when it comes to hotels, how some of the 
boys have to suffer ! Well do I remember a hotel in Utah, several years ago, 
when occasion took me there to adjust a loss, and with the principal, a fel- 
low adjuster, our agent and the appraisers, alter a hard days work, we went 
to the hotel to get a bed and to get some sleep. My friend and myself occu- 
pied one room but separate beds, and he, tired out, at once dropped off to 
sleep; while I, too tired to sleep, lay for some time and was just beginning 
to get a little drowsy when I heard my friend turn over in bis bed, and then 
he began to scratch. After a little he turned over and did more scratching. 
This at first was a curious feature to me, but it was not long befo-e I was 
fully initiated in the mysteries, and after tossing all night woke up at day- 
light and with pin in hand impaled six lively fellow T s, and it was nut a good 
day for bugs either. I allude to this little experience to show what the spe- 
cial has to encounter. 


Of course this is but one of hundreds and thousands of instances that 
might be related to show the hard way, the rough road, the many and vari- 
ous features which are encounterel in the life of the adjuster as well as 
special. To those in the profession who iu this country have bt-en many 
years in the service, I think we can without reserve refer to this matter, and 
shall have not only their careful words of commendation in this respect, but 
at the same time incidents without number to show the many difficulties 
which they in early days have been obliged to meet in California and its 
vicinity. Taking, therefore, the life of the special, it has its disadvantages; 
to one who is not provided with a family it possibly is not without enjoy- 
ments, and certainly it has many features in the way of change of scene and 
climate and experience to commend itself to them. A good special is always 
in demand, and the better the man the more readily can he find a market. 
At the present moment, while writing these words, I have in my mind a 
special in this field who without delay or trouble, without anxiety passed 
from one office to another, enabled by his ability, suavity of manner and 
general standing among the country agents, to obtain employment without 
any difficulty whatever; and it is to be commended to the special the fitting 
himself for just such occasions as this. Changes are frequently taking place 
which are not at all occasioned l>y his lack of ability or other reasons by 
which he is compelled to seek other occupations, and from good standing is 
able at once to obtain employment and a lucrative position. 

The adjuster who carries out the objects of the association, viz.: "this 
association was created for mutual information of its members, for the pro- 
tection of the interests of the companies to which they are attached, for the 
advancement of harmony and sound practice in the transaction of the busi- 
ness of fire insurance on this Coast, "will certainly have performed nobly 
his part in the work. In text-books we have been given the definition of an 
adjuster, have been told of the manifold and wonderful qualities that should 
be combined in one man, called an adjuster, and certainly if any one man 
could only live and' possess all the good features as Liven in the books, and 
have none of the bad ones, that man would be altogether too valuable to 
walk the streets. He would be sought after by so many that he would have 
to be encased iu glass and viewed only as one does a specimen in a cabinet. 
Unfortunately in this age the average adjuster is a man possessed of all the 
attributes of humanity, and can hardly be said to be perfect; some better 
than others, but I think all of them trying to excel in their profession. The 
Committee on Losses and Adjustments will in all probability consider me in 
a measure trenching on their preserves, and in their reports, which I hope 
they will favor us with, treat on not only the adjuster, but the manner and 
subject of adjustments. 

The past year has been one of prosperity to the companies, and the state- 
ments shown present some very interesting figures. To the Committee on 
Statistics we shall look for tables and ratios, and opine that when the com- 
mittee are finished you will agree with me that the choice of committeemen 
was well made. 


To the members of this association the foregoing remarks are commended, 
and while in the year past, possibly, the meetings may not have been as en- 
couraging as we should have liked, yet I trust under the auspices of my suc- 
cessor that every meeting from this time forward will be possessed of special 
interest. I commend to your careful consideration the features of changing 
the constitution and by-laws with regard to fixed committees, doing away 
with them and substituting therefor the system adopted by the Underwriters' 
Association of the Northwest, of appointing members to write papers on 
special topics. I believe too much cannot be said with regard to this feature, 
and that you will obtain a greater amount of interest in your meetings for 
the future than by pursuing the beaten track, which we have been doing now 
for twelve years, of relying on committees who are limited almost in line of 
thought to the few forms which are laid down by the association. By adopt- 
ing the new system there seems to be no limit hardly to the subjects which 
mriy be brought up for consideration and enlarged upon for the advancement 
of the profession of underwriters. I fully believe that this will redound to 
the credit of the association, and will do more to produce this result than 
years will under the present method of procedure. 

I now desire to give way to the regular committees and also other gentle- 
men who are to favor us with papers and remarks, and have no doubt that 
every one of the committees will do noble work with regard to subjects upon 
which they have to treat. I thank you for the attention which you have 
given, aud also the honor which you have conferred upon me by electing me 
to the position of President of this Association. 


The President — The next report will be that of the Execu- 
tive Committee. 

Mr. Belclen — As heretofore the report of your Executive 
Committee has been noticeable owing to its extreme brev- 
ity, I will state that this year's report is not an exception 
to the rule. 

Mr. Belden then read the report of the Executive Com- 
mittee as follows: 


San Francisco, Cal., February 18th, 1888. 
Mr. President and Gentlemen — In submitting our report for the year of 
1887 we have to state that upon examination of the books «nd accoun's of 
the Secretary and Treasurer, same were found correct and were duly audited. 


We would call your attention to the increased expenses for the past year, 
namely, $489.95. This was occasioned by the following items, namely, 
$22.50 additional expense for printing annual proceedings, same being 
$202.50 as compared with $180 for 1886, owing to the fact that same have 
increased largely in volume, as the various members are now called upon to 
furnish individual papers; $30 was expended for funeral expenses and some 
$50 contributed to the expense of the annual dinner. 

Independent of the annual dues, entrance fees and the sale of books, the 
Association has very few sources of income. To meet our last year's expend- 
itures an assessment of $1 per member was necessarily made. This was the 
second assessment in three years, one of $2 per member having been made 
in 1885. Much embarrassment has been experienced in the payment of va- 
rious bills against the Association owing to the lack of funds. The Secre 
tary is obliged to defer the payment of many accounts until the collection is 
made of entrance fees from new members during the year. Considering 
these facts, the committee would recommend the advance of the annual dues 
to $3.50, same being an increase of $1. 

Kespectfully submitted. 


The President — Gentlemen you have heard the reading 
of the Executive Committee's report; if you have no objec- 
tions it will be received and placed on file. There being no 
objection let it take that course. 

The next thing in order will be the report from Local 
Agents; is Mr. Gurrey present. 

(There was no response.) 

Mr. Belden — In regard to the suggestion as to the amend- 
ment of the Constitution. As it is necessary that a motion 
should be made before such amendment to the Constitution 
can be had, would it not be in order to make such a motion 
now ? 

The President — You can give notice that you want the 
Constitution amended in that direction; that is perfectly 
proper, and you can introduce that and it will be brought 
up at the next meeting. 


Mr. Belclen — Then Mr. President I give notice that I will 
make that a motion at the next meeting. 

Mr. Chalmers — Mr. de Veuve being a young member of 
the association and very bashful, has asked me to read his 
report for him. 

Mr. Chalmers then read the report of Mr. de Veuve on 
the subject of i 'Local Agents," which report was as follows: 


Gentlemen and Fellow Members — In presenting this paper for your 
consideration I trust you will cast the mantle of kindness over your crit- 
icism, and bear in mind that it is a maiden effort, and, in the language of the 
poet, think that "he's done his level best." 

I presume most of you have heard so much said and read and written 
upon the subject of local agents that it is scarcely possible to write any- 
thing further interesting or instructive, but I shall endeavor to give you a 
synopsis of my idea of conducting a local agent's department, guiding 
the local agent, and the reasons therefor, and also to give you a few ideas I 
have gathered from time to time from the ranks of our local co workers 
as to how the local should be dealt with. 

In the first place, the idea a large number of us have is that the local does 
not amount to much except as a good, faithful (sometimes) old horse, 
harnessed to an old cart, and that the special's duty is to come along 
with his whip of superiority and drive the old fellow into activity by laying 
on the lash, well sprinkled with cajolery and "bulldozery," so the result 
may be that "our " company will get a new risk or two during the special's 
visit. To those of us who entertain such thoughts I think a fit pun- 
ishment would be for us to be harnessed beside the old fellow for a few 
years until we are fully convinced of the error of our ways. 

There is no doubt in my mind that if we desire to preserve our business 
and secure our companies from severe and frequent losses, we must adopt 
a new plan, and drive the '* old horse " idea from our minds by making 
ourselves believe that the local agent should be classified as the vital force 
of the profession. To do so, and to have our agents think so, we should 
endeavor to draw them closer to us in every way, to give them more of 
our confidence, to thoroughly inculcate that our business is not one of a 
week, or a day, or a year, but an everlasting and honorable one; that 
the agent who sends us a large volume of general premiums is not so much 
loved by us as the one who exercises care in the selection of his risks, 
although he reports a smaller amount. 

I have no doubt you will all join me in the assertion that the prevailing 
idea amongst our local agents is, that we, that is, the companies, want pre- 


miums, any and all kinds, so that they can exhibit a large premium income 
when they strike their balance at the end of the year. For such ideas we can 
but blame ourselves, for we have entered into such hot competition with each 
other that we have oftentimes accepted business from locals against our 
judgment so we might give them the idea: " Well, he's a good fellow, and 
his company is a nice one to deal with and must have some business," 
and we get it; but for every good risk we receive about three bad ones — for 
have we not as good as told our agent we were willing to accept a bad risk 
once in a while if we could get a good one in return for it? 

To do away with ideas of this kind, which may be entertained by our 
locals, and to draw them closer to us, we should put them on a different 
basis by making them a sharer of our profits. There is no question in my 
mind that if we should put our agents under direct and contingent com- 
mission, we would soon do away with this very pernicious practice of 
accepting all kinds of hazards, and that our agents would take more care 
in studying up different classifications of risks. By so doing we would 
materially advance our interests in a great many ways. Our locals would 
not then want to adjust any of their losses, and would probably lend 
the adjusters more assistance than is now usually done. For would they 
not be losing money, as well as the companies, and would it not be equally 
to their interest to assist and examine closely into every loss with the ad- 
juster, so that every cent of just salvage could be determined and the as- 
sured should get but his just dues? Would not our agents show more 
attention to valuations when accepting their lines, and would they not enter 
heartily into the detection and prosecution of incendiaries, for each and 
every unjust claim against the company would be an unjust claim against 
themselves? I think they would. 

Then, again, when we have placed our locals upon a footing which will 
draw them closer to us, would it not be well to segregate the good from the 
bad, the active from the dormant, and the honest from the dishonest ? How 
shall we do it? Certainly a very excellent way to begin, and the only way, 
would be in the matter of handling of our moneys. We should insist upon 
all premiums being remitted to us by our agents every thirty days, and a 
failure to do so subject the local to the withdrawal of his agencies. By 
adopting a rule of this kind it would compel the negligent agent to attend 
to his business more carefully and promptly ; it would soon unmask the 
dishonest and would force from the business a large number of so-called 
agents whose only plea for business now is, "my managers are obliging, and 
if you will give me your risk I will wait for the premium until you are 
ready to pay the same." All specials have probably had agents of this kind, 
and time and again, when on their trips of inspection, have had policies in 
force sixty and ninety days, and sometimes longer, turned into their ac- 
counts with the legend " canceled for non-payment of premium." We should 
certainly avoid this eye-sore were we working on a thirty-day basis. I find 
upon laying this matter of the thirty-day remittance before the agents it 


meets with almost unanimous endorsement, and I have made an especial 
point of asking their opinions in reference to same. 

A few years ago, when I was a local agent's solicitor and knew a great deal 
more about the business than I now do, I had the audacity to write an ar- 
ticle to the Coast Review entitled " A Local Agent's Plaint," in which I 
scored the appointment of " cross-road agents " as an act unworthy an intel- 
ligent special and likened the said cross-road agent to "the bull in the 
crockery shop." My article met with such a sarcastic reply from some 
gentleman signing himself " manager " (who lives not a thousand miles from 
Red Bluff), that in my innocence I was " squashed," but I have not entirely 
forgotten the " cross-roader," and I may state that I think the appointment 
of them is a great injustice to our ambitious and loyal locals who make the 
insurance business their principal pursuit. 

I thank you for your attention, gentlemen. 

J as. H. de Veuve. 

The President — Gentlemen, this paper of Mr. de Veuve's 
who signs himself a very young man in the profession is an 
able and excellent one, and I think it is deserving at your 
hands of serious consideration, and I hope you will make a 
feature of this "contingent" business at some future meet- 
ing. It is one that has attracted the attention of the under- 
writers at the East to a large extent, and one that they have 
been fighting with for a long time, and I hope by taking it 
up here we may evolve something which may not only be of 
service here, but also in the East. The next business is on 
" Forms of Policies/' and I may say I am extremely sorry 
to have to read this letter; I hoped that we should get some 
excellent ideas from this committee. 

San Francisco, February 20th, 1888. 
J. W. Staples, Esq., 

President Fire Underwriters' Association of the Pacific: 
My Dear Sir — It is with much regret that I am obliged to announce that 
there will be no report from the Committee on Forms of Policies. On re- 
ceipt of your reminder of about four weeks ago, I intended to at once see 
Mr. Dutton and Mr. Herrick, fellow committeemen, and arrange for a joint 
paper. Unfortunately within forty-eight hours of its receipt I was taken ill 
and was unable to be at the office for between two and three weeks, and 
after that only for an hour or two a day. As soon as possible I called on 
Mr. Dutton and found him just on the eve of starting upon an Eastern trip. 
Mr. Herrick, in reply to a call, stated that in consequence of Mr. Laton's 
illness he was too fully occupied to attend to anything else. Very near to 


the close of the twelfth hour, I made an attempt to save the credit of the 
committee, but found that the subject was one which required too much of 
thought and research to be hastily performed, and so concluded to ask the 
indulgent pardon of the Association and its President, which I now do. 
Very sincerely yours, 

Edward Brown. 

There being no reports from the committee on Forms of 
Policies, we will now listen to the report on "Fires and 
their Causes," by Mr. William Sexton. (Applause.) 

Mr. Sexton — I will say, Mr. President, that I was an 11th 
or 12th hour man myself. I got in but two weeks ago, and 
got the following replies to letters that I wrote to friends of 
mine in the insurance business. 


Mr. President and Members of the Fire Underwriters' Association of 
the Pacific — Gentlemen: President Staples pressed me into service to fur- 
nish a paper at this meeting "on fires and their causes," and in turn I 
pressed the members of the association, and expect that you having fur- 
nished the paper, will vote it good or quietly pass, "yours truly " not being 
responsible for anything contained therein. 

To press the members, I sent each one a stamped envelope with my 
address, and the following, and herewith give you the replies: 

San Francisco, Jan. 21, 1888. 
My Dear Sir:— I promised President Staples to furnish to the association a paper on 
"fires and their causes," and as this calls for actual "cold facts," probabilities or 
theories won't do; we must have your experience to help out. Please sit down (the asso- 
ciation meets next month) and write what you know about common and uncommon 

causes of fires, and very much oblige Your needy friend, 

Wm. Sexton. 

Reply No. 1. 

Dear Sir :— Your characteristic communication of 21st covering a stamped envelope lies 
before me; were it not for the fact that it would cost me two cents to return the two cent 
stamp, and that you would " put me down on the list" of those who had "stood you 
up " for that poor sum, I should sit down " on your demand for my experience with "fires 
and their causes." This unqualified term " fires " leaves one in doubt as to which expe- 
rience you wish. If it is with material fires, in which insurance companies have from 
time to time felt a warm interest, a curse-sore-eye glance down my column of causes 
reveals a startling majority of " supposed incendiary " over all other well-defined causes. 
If you refer to the causes of the fire that "never dies," judging from the experience 
of others (not having kept a register myself), they lie in, first, an inexhaustible supply 
of brimstone; and second, in the ever increasing number of persons dependent upon 
the burning lake of the next world for their bread and butter in this. If you mean the 
fire that one is sometimes influenced to get outside of by the genial local, the cause of 


its fierceness is found in the desire of the average man to feel rich. Believing that yon 
will find in this ample reasons for discarding it, 

I am yours truly, X. Y. Z. 

We called for " cold facts;" he gives us theories. 

No. 2. 

Dear Sir:— Your circular of the 21st has just been received, asking me to give you some 
actual cold facts about what I know regarding common and uncommon causes of fires, 
and in reply beg to say that my views are on file with the Association in a paper on 
that subject; if, however, I can cudgel up anything new you shall have it. Hoping 
that you will be more successful with others, I remain yours, L. C. 

Instead of cold facts, we get a cold shoulder; have not heard from him 


No. 3. 

Friend Sexton : Your appeal for assistance received, and to help you I have overhauled 
our record for years and give you what I find, but fear that our friends of the asso- 
ciation will say " rats." We have the straight losses from the worn-out, moth-eaten 
stove-pipe — cracked chimney — children and rats with matches — badly-constructed 
hearths in fireplaces — steam boilers and steam pipes too near wood — lubricating oil 
stolen and sold by' the engineer — Babbitt metal stolen, and wood put in its place— fast- 
running belts generating electricity — and a lot of other causes that should be prevented, 
but are not, and must be charged for in making the rate. A recent fire in a store 
window in Victoria was caused by the sun's rays from a lamp-reflector focussing on an 
umbrella. A fire in a big new silver mill was caused by a spark from the watchman's 
pipe falling on the painter's cast-off clothing. We paid for that spark. A less careful 
mill-owner would not have had a loss from employing a watchman. 

Yours truly, G. F. 

A friend in need is a friend indeed. No. 3 came in in good time. 

No. 4. 
My Dear Needy Friend:— In reply to your circular of 21st I will say that I have no facts 
relative to fires and their causes that would be of any value to you. 

Believe me your friend, S. I. 

This from one of the most active and observing men on the road, is dis- 
couraging; will see that he is on a committee next session. 

No. 5. 
Dear Sir:— I cancelled a flour mill in a country town because it had been changed from 
a stone to a roller mill. It burned from "cause unknown " within three months. "Was 
paying, and the moral hazard A 1. My experience is that the new roller machinery can- 
not be properly fitted in a cut over mill, will be crowded and cause friction, and makes 
a hazard that cannot be measured. Better " keep off." Your friend, J. L. 

That is short, but is worth fourteen pages of excuses; and being from one 
of the most prudent and successful underwriters in the city, will do "to 
paste in your hat." 

No. 6. 

Dear Sir:— Our sewing girl gathered up tne pattern scraps, bits of thread and cloth in 
her apron, and in emptying them into the grate her apron caught fire, set fire to the 
mantel, drapery and window curtains, making a loss of 50 per cent, on the policy. I cite 
this case, as I believe it to be the duty of every one you call on to do something. 

Yours, J. D. M. 

He don't say anything about the girl; she was not insured, I reckon. 


No. 7. 

Wm. Sexton, Esq., Dear Sir :— You ask me for some cold facts regarding the causes of 
fires. Why, bless your underwriting soul ! don't you know that the hottest lies wouldn't 
tell half about "causes?" Carelessness, Cussedness and Cupidity, 75 percent, (equally 
divided); Causes (unknown), 20 percent.; and Combustion (spontaneous), 5 per cent., 
make the five "C's," and settle the whole question. What is the use of facts and fig- 
ures — which only mislead — when estimates are easier, more Sc tisfactory and more truth- 
ful? Good morning, William; next time ask me something harder. 

Yours faithfully, Ceemka. 

Evidently just home from a bad loss in the back country, where the bed- 
room furniture consisted of a sack of straw, a blanket and a broken window, 
and the cuisine of pork and yellow soda biscuit. 

No. 8. 

Dear Sexton: — If you will call at the fire marshal's office you will find causes of fires 
that will make the few remaining hairs on your bald head stand on end. Samples of 
coal oil, very few of which are up to legal standard, and some that will flash at the drop 
of a hat. This oil is not for use under boilers in factories, where competent engi- 
neers are employed to watch and care for it, but is for use in families where the oil-can 
is kept near by the kitchen stove. You will also find a museum of pitch pine, sugar 
pine, common pine, and may be, incombustible redwood candlesticks covered with fire- 
proof tallow, the residue of burned out candles, which Mr. Marshal picked up and 
brought in from places in the city. Mr. Marshal also reports finding bales of jute, oakum 
and excelsior, counters, tables and posts used for candle-holders; these he could not 
confiscate. Yours, in fear and trembling, Compact. 

A look at that museum next door will pay. The "stub candle" and the 
" hinged gas bracket " need careful attention, particularly when examining 
cellars or basements. 

No. 9. 

My Dear Boy:— Your circular, asking for cold facts in relation to "fires and their 
causes," received. What is the use of figuring; what is the use of muddling people's 
brairs with so much trash? Have cot our insurance sharps figured rates down to the 
small end of nothing, and then allowed the broker and the assured to cut that in two? 
This remark applies East this year, where the surplus of 1886 was reduced 10 per cent, 
in 1887, and may apply here next year. Stillman and the compact, with common sense 
instead of fine-spun theories, kept up a fair rate at this end, and will enable some of the 
companies to pull through another year. Brokers and assured make the rate, and brokers 
and agents make the commission — used to, before the compact, and once in a while do 
now— sub rosa, you know. Don't spoil our bread and butter by trying to teach people that 
property can be made fire- proof ; can't make it, you know. Let them make the hazard, 
and let us make the rate; we take it as they make it. Principal causes of fires are 
tramp agents and irresponsible brokers. Pay a good agent as much commission as you 
do a poor one. Use a little more horse sense, and you won't be called on to rise and ex- 
plain why a rough-board, unbattened, shake-roofed barn, on a 20-acre lot, is worth less to 
insure than one that is rusticed, shingle-roofed and fire-proof painted is on a 40-acre lot; 
or why horses and mules on a 10,000-acre ranch are worth as much to insure as the frame 
barn on that ranch. Durn your figures ! get down to business. 

Your disgusted friend, P. D. Q. 

That don't answer my note, but gives us something to chaw upon. 


No. 10. 
Dear Sir:— I am in receipt of yours of 21st, asking me to help you out on fires and 
their causes. Now, friend Sexton, don't you think, for cold, unadulterated "cheek," that 
this will equal any amount of mule "meat" that you have ever encountered in the 
mountains of Colorado ? I have my hands full with my own paper, for the information 
and delectation of the members of the association, and not a single word yet written. 
Yours very truly, N. M. O. 

A fellow feeling makes us wondrous kind. I excuse him; hope you will. 

No. 11. 
Dear Sir:— Yes; I have a cause of fire. We found, after a small extinguished blaze, 
that an angular piece was broken out of the terra cotta flue. My experience and informa- 
tion is, that terra cotta and ironstone pipe, all the same, will granulate and break from 
expansion and contraction, caused by heat inside and cold outside; and I am satisfied 
that this is the cause of many fires. Ever yours, H. H. G. 

Terra cotta flues, where covered in, in a building, are not much better than 


No. 12. 

Dear Sir:— In reply to your circular of 21st, beg to say that a big fire in San Bernardino, 
some years ago, was caused by spontaneous combustion of straw bedding in a manure 
pile, and I am certain that many fires occur from wet hay. C. John Hexamer, in con- 
tributed papers to the Spectator, says that competent authorities all agree that dried hay, 
properly cured, could, under favorable circumstances, ignite spontaneously on becom- 
ing wet. Yours as ever, J. "W. 

Mr. H. must be correct, as our experience is, that hay-barn fires occur 
about the time that the winter rains assure a good next season's crop; a 
wise dispensation of Providence to ''keep down the surplus" by means of the 
rain that produces a new crop, destroying the old one. 

No. 13. 

Dear Sir: — Some years since an uncommon cause of fire cost us $5,000. The grown son 
of a wealthy farmer contracted a loathsome disease, and his physician, believing in 
prevention as well as cure, fitted him for a "harem guard." A bullet and a cremation 
scene ended his earthly career, and his burned bones were found in the ashes of his fa- 
ther's $10,000 dwelling. Yours, F. B. 

Will some of our compact raters figure out what should be added for this 
class of exposure ? 

No. 14. 
Dear Sir:— Your circular of 21st received and noted. Fires in hotels are often caused 
from the hot fat-kettle used to cook the Saratoga chip— to fry the crisp doughnut and to 
soften the burned leather steak. This fat is also useful to start the fire with. This ket- 
ile sometimes boils over; then the fat is in the fire, and the hotel goes up in smoke- 
cause unknown. Don't say anything to a hotel Hndlord about this, as his hot fat-kettle 
is fire-proof. Very truly yours, D. W. T. 

Hotel kitchens should have asphaltum floors, brick walls and iron roof. 

No. 15. 

My Dear Sir:— I find the following uncommon cause of fire in the Fireman's Herald: 
A sponge that had been used for some time in wetting an emery wheel by capillary attrac- 
tion, used by a manufacturer of plane bits, was laid aside just as it was taken from 


the wheel, being filled with minute particles of very hard steel. In time it became dry, 
lying on and against pieces of wood. After lying a week or ten days, it was found to be 
a living coal and to have set fire to the wood. It had burned the twine and cloth at- 
tached to it; all were smouldering, and although flames had not burst forth, they would 
have done so in a short time. The pieces of wood were each burned to a depth of a 
quarter of an inch and a width of three inches. When the sponge was broken it showed 
that the iine particles of steel had been thoroughly distributed in its interior. The 
cause of the fire was the rapid rusting of the steel. Yours truly, O. L. D. 

Chemical action is responsible for many fires charged to incendiarism, or 
rats with matches. I heard of a case where a fire was started with salt water 

and iron shavings. 

No. 16. 

My Dear Sir:— In adjusting a loss on a nice $3,000 dwelling, insured for $2,000, 1 did 
not get at cause of fire until I found divorce proceedings on hand, and found that the 
assured could not realize except at the expense of the insurance company; his fighting 
worser half wouldn't sign a deed. We had no direct proof to fight on, so settled at a dis- 
count, and refused to lower our dwelling rate, on the ground that a woman was around to 
look under the bed, to smell smoke and to care for the risk. 

Yours truly, J. B. D. 

Compact rater must add a little for exposure of divorce court. 

No. 17. 
Friend Sexton:— In reply to your needy request of 21st, I send this from a Berlin paper: 
A question before a Prussian court was — Could fuming nitric acid occasion spontaneous 
ignition ? On hearing the testimony, it was decided that the jar had leaked and the acid 
had come in contact with a roll of woolen cloth, whereby the latter was set on fire. 
All woolen goods and all hair of animals, horn, and such articles, have the property of 
igniting when in contact with fuming nitric acid. Yours, D. W. C. 

Watch woolen rags around drug stores, or places where acid is used. 

No. 18. 

Wm. Sexton, Esq., Dear Sir:— In reply to yours of 21st I can give you local experience 
with the coal-oil lamp, which, like a gun, is dangerous— loaded or not loaded. Here are 
two cases of unloaded danger: In a lawyer's office at Los Angeles one afternoon, the 
chimney of an unlighted lamp flew to pieces, and one piece struck and set a bunch of 
matches on fire; and had there been no one present, would probably have burned the 
building, and been another case of "cause unknown." Another — At the old Pacific Hotel, 
Tulare, about five in the afternoon, the sun shining through a window and through a 
clean round lamp filled with white oil set the paper and lining on the wall on fire; burned 
about six inches wide by thirty inches long when discovered. 

Yours truly, C. F. D. 

We have enemies in every direction. 

No. 19. 
Dear Sir: We have paid a number of losses on property burned by the owners when 
insane. Yours, CM. 

No remarks. 

No. 20. 

Wm. Sexton, Esq., Dear Sir:— In reply to your begging screed of 21st, I can say that I 

have a number of uncommon or unlooked-for causes of fire. We paid $2,000 for a town 

library hall, because a young man's best girl threw off on him and went to the dance 

with the other fellow. He burned the hall and we paid for that quarrel. We paid for a 


country school-house because a D. B. burned it to lengthen his vacation. We paid for 
a large private academy and contents because the professor's wife was jealous of a lady 
assistant, and fired the building to fire the assistant. We paid for a school-house that 
did not set in the right place in the school district and could not be legally removed. 
We paid for our share of an Arizona town, because a saloon-keeper got married and his 
former lady love burned him out, and burned the block. 

Yours, D. N. J. 

We pay many losses on incendiary fires that are not incendiary losses — 
property not burned to get the insurance. Can't be helped or foreseen,, 
and must be charged for in the rate. 

No. 21. 
My Dear Bro. Sexton: — Your favor of 21st, asking for my experience with common or 
uncommon causes of fires came duly to hand, and found me very busy. I will, how- 
ever, take a little of my valuable time to say to you that I have not made a study of fires 
and their causes that destroy insurable property which amounted to about $130,000,000 in 
the United States aild Canada in 1887, but as a friend of humanity I take an interest in. 
the fire and the cause that destroys the men of the nation, and burned property to the 
amount of $260,000,000 in 1887. I mean the consumption of cigars and cigarettes, which, 
as you see, costs twice as much as the insurable property, and not half as much noise 
made about it. Now sir, if you want to do something for suffering humanity, call the at- 
tention of your associaticn to this subject, and let the members do something towards 
remedying this growing evil. I will take pleasure in giving you further information 
and statistics on this subject. Yours in brotherly love, B. H, F. 

The brother is a crank. 

No. 22. 
Friend Sexton:— Your association meeting reminder of 21st received and noted. I had 
a grain crop loss to settle, and on arriving on the ground found that three stacks of grain 
had burned. Stacks were about 300 yards apart; fire started on the sunny side of each 
stack, about ten in the forenoon, and as fire did not spread from one to the other, the 
cause of fire was unknown. I adjusted the loss, and then interviewed the owner and 
asked him if anyone had suggested the cause of the fire. He said that a neighbor 
suggested that phosphorus in a wet cloth placed in the stacks in the night would set fire 
when the cloth dried. I asked him if he had had any phosphorus on the place. He said 
no; but on inquiry I found that he bought two cans of phosphorus the day before the 
fire, then told him that when he wanted his coin to call for it. He never called. I 
have another cause that we have laughed at. In San Joaquin Valley last summer I saw 
three burnt holes in a fence, caused by the sun's rays focus from the bottom of a milk 
pan. Yours, E. L. B. 

Don't insure over half value on grain crop. 

No. 23. 
Friend Wm.:— Hot boxes in manufacturing establishment are a common cause of fire; 
the last one reported is the Benton, Holmes & Co. big mill at Blakely. Please note and 
oblige Yours truly, G. C. J. 

No. 24. 
My Dear Sir: — I have your favor of 21st, and am pleased to give the association my 
views on fires and their causes. I have observed, during my short experience as a special 
agent, that insurance men are ever ready to charge all unknown causes of fires to incen- 
diarism by the assured to get the insurance money; they bring to mind the old time 
church doctrine, that credited all that the members could not understand or control 
44 to the power and instigation of the devil." This sweeping charge that all or about all 


of the fires are set to get the insurance money has a discouraging effect on honest in- 
surers — leads them to believe that their money is paid out to frauds, that insurance men 
are careless> that the rate would not be half as much if we would not over-insure bad 
men. This the honest insurer learns from the adjuster, and knows that it is gospel 
truth; this makes him sour, crabbed and cross, and sometimes prevents good men from 
insuring. Having had a long experience in other lines of business, and but short in 
insurance, I have a better opinion of my fellow man than the old adjuster seems to have, 
and to get for you some "cold facts " on this subject, I find that from February, 1851, 
to July, 1881, thirty years, there were 368 arrests in San Francisco for incendiarism, of 
which 72 were convicted. The fire marshal's report for from July, 1865, to July, 1882, 
shows 4,828 fires, of which 570 are reported as incendiary, being about 12 per cent. Cap- 
tain White's patrol report from 1877 to 1887 shows 2,861 fires, of which 115 are incendiary, 
being about 4 per cent. Of 3,412 fires and alarms in New York City in 1887, all are ac- 
counted for except 105— about 3%. These are "cQld facts," Mr. Sexton, and I respectfully 
suggest that adjusters be more careful and not charge all they don't know about the 
causes of fires to the cupidity of the assured. I also find that one-sixth of the so- 
reported incendiary fires in San Francisco were on property not insured. 

Yours respectfully, M. N. 

There may be something in M. N.'s notion worth looking into. 

No. 25. 
Dear Sir:— In reply to yours of 21st, will say that I believe that quick settlements are 
the principal cause of fires —money is paid too readily — property realized on too quick — 
more delay would discourage incendiaries. Yours truly, K. L. M. 

,l No pay at all would be a better cure." 

No. 26. 
Friend Sexton:— A late paper gives cause of a big flour-mill fire at Rochester to be 
leakage from Oil Co.'s pipe line, leaking gasoline into sewers, which ignited and ex- 
ploded, burning and destroying three flour mills. Another paper gives causes of cotton 
fires to be Negro laborers carrying matches in their wool and losing them in the cotton. 

Yours truly, F. S. 

The colored brother should not have any wool where the wool ought to 

No. 27. 
Wm. Sexton, Esq., Dear Sir:— I am satisfied that the three-quarter-loss clause and the co- 
insurance clause are our only salvation against so many fires. I have favored these 
clauses for years, and we must come to them soon or companies will have to retire. 
Hoping that the association will recommend them, I am yours truly, D. W. D. 

11 We are doing well enough; let well enough alone. ,, 

No. 28. 
Wm. Sexton, Esq., Dear Sir:— At Albuquerque, last September, a liveryman was driving 
his four-horse team load of hay into his building, occupied as a livery stable on the first 
floor, and lodgings on the second. The load was too large for, and jammed in the door. 
A lodger up-stairs, hearing the rumpus of the driver and team, leaned out the window, 
lost his balance, fell on the load and rolled to the ground. His cigar set fire to the hay, 
which soon burned down to fit the opening. The horses ran away with the burning 
wagon, and ran into a pond, got entangled in the harness and were drowned. The in- 
surance company paid the loss on the building, but refused to pay for the horses, and a 
lawsuit has grown out of that inquisitive man's cigar. Yours, J. C. A. 

That company is probably a fire and not a marine company. 


No. 29. 
Dear Sie:— A pet monkey set fire to the yacht Norma by taking matches to its nest of 
oakum and rags. A negro had his scalp burned by matches in his wool being ignited by 
the friction of a policeman's club. A fire in a Leadville millinery store was caused by 
coal oil flashing while being used to rub a rheumatic patient. A fire at Bloomfield, Neva- 
da county, was caused by a miner, a dog, a lantern, and a can of coal oil. The dog attacked 
the miner, who bursted his can of coal oil on the dog, which caught fire from the lantern, 
then, howling with pain, the dog ran under and set fire to a building and burned the 
town. Truly yours, D. S. K. 

The monkey and the negro story may be true, but the dog story is report- 
ed a make-up. 

No. 30. 

Wm. Sexton, Esq., Dear Sir:— I have your favor of 21st, asking for my experience with 
fires and their causes, and in reply beg to say that I don't know anything about causes. 
I know about fires; know that we have fires; know that combustibles will burn; know 
that our building materials are combustible; know that we build our buildings with 
combustible materials; know that we can't afford to build with non-combustible materi- 
als; know that it would cost too much. You know all this. All insurance men know 
that we can't afford to build fire-proofs; they know that fire-proofs would cost not less 
than twice as much as our present tinder-boxes, on which we pay an average rate of not 
over one per cent., or rate enough to replace them in one hundred years, They know 
that the simple interest on the difference between the cost of nre-proof3 and our tinder- 
boxes at say 3 per cent, per annum, would replace these tinder-boxes every thirty- three 
and one-third years. You know that it is cheaper to burn and rebuild each one hundred 
years than to bury coin, the use of which would replace the property every thirty-three 
and one-third years. I know that there is no difference in the destruction of property 
between burning and burying it— either is a destruction, but the former is the less cosi- 
ly. We know that the contents burn with the buildings, and often burn the buildings — 
contents cannot be made fire-proof. We know that the fire loss does not keep up with the 
increased value of property, but it won't keep down, because we keep on reducing the 
premium income. Will let you know more some other time. 

Yours truly, N. E. W. 

That is queer figuring. N. E. W. makes insurance cheaper than interest; 

guess he must be mistaken. 

No. 31. 

Dear Sir: — In building my house, the chimney had to be carried up about 25 degrees 
from a perpendicular, and the builder, to save labor, carried one brick wall up straight 
to support the second floor joists, leaving a space between this brick wall and the lean- 
ing chimney. This space caught shavings and chips from the second floor, and a short 
time since these shavings caught fire and smouldered a day or two before being discov- 
ered; the heat and smoke gave us notice, and saved another fire, "cause unknown." 
Dishonest builders cause common cause of fires. 

No. 32. 
Dear Sir:— I had afire in a wine cellar caused by the spirit gas or vapor from an empty 
wine cask coming in contact with a light. An ordinary big oak wine cask will absorb 25 
gallons of wine; and when empty, the vapor or spirit of the wine will evaporate from the 
wood into the cask, and will explode as readily as any other gas. 

Yours truly, D. L. 

Have heard of a number of wine cellar fires from this cause. Lights should 
be kept away from empty wine casks, or any casks which contained spirit- 
uous liquors. 


No. 32. 
Friend Sexton:— I find a hazard connected with gasoline stoves that is new to me and 
may be to a majority of the association — that is, filling the reservoir with coal oil instead 
of gasoline; mistaking the coal oil can for the gasoline can. The gasoline in feeding to 
the burner forms a gas as soon as brought into contact with the hot burner, but coal oil 
Will escape in a burning stream and fall on the table or floor, burning where it strikes. 

Yours, Y. F. W. 

Should make a big skull and cross-bones on the gasoline can. 

No. 33. 
Wm. Sexton, Esq., Dear Sir:— Several years ago, the family of "Wilson Holt., Esq., left 
their residence in Paper Mill village, N. H., closed for a short time, and upon returning 
found the table-cloth and the table in the room partly burned, the fire having gone out 
for want of draft. It was found that a glass globe containing water was standing on 
the table where the sun's rays passed through, and by acting on the principle of the sun 
glass, had set fire to the table-cloth. Had the dwelling burned it would have been put 
down to incendiarism. Yours, R. A. G. 

No. 34. 
Dear William:— In a small country store about eight in the evening a falling piece of 
tinware grazed and fired a bunch of matches, which set off a pile of cotton bats, making a 
good blaze which was easily put out. An inventory taken a short time before led to an 
investigation which showed one partner up as a "secret, black and midnight thief." The 
atock was short. Now, suppose that this piece of tinware had fallen at night and every- 
thing but the books had been destroyed. The trouble in the firm, well known in a small 
town, with a small stock overinsured, I leave you to fill in the suspicion, not to say 
proof, of fraud that such a state of affairs would furnish good grounds for. 

Yours, F. G. G. 

Yes; that would have been a clear case of fraud, incendiary, rats with 
matches or friction — a big policy rubbing against a small stock. 

No. 35. 
Wm. Sexton, Esq., Dear Sir: — I find in a late number of Monitor causes of fires from 
spontaneous combustion, viz.: "A barrel of shavings from oiled wood, moistened with 
water, burst into flames." "Sea Island cotton caught fire from cotton seed oil mixed with 
the cotton; the cotton had been ginned in a roller gin which crushed the seed." "Oil 
from a barrel containing putty, composed of whiting and boiled linseed oil set the floor 
on fire under the barrel." " A bunch of engineer's waste placed near the door of a boiler, 
spontaneously ignited, started the fire in the kindlings and fuel, under the boiler, and 
made steam sufficient to wake the watchman." " Moss, colored for decorative purposes, 
in thin paint or varnish, charred; but the odor led to its discovery before ignition," 

Yours, S. L. O. 

No. 36. 
Dear Sir:— My friend W. W. S. found fire in his stored wool, caused by the wool getting 
wet. And my friend D. W. T. had a fire in his barber shop, caused by spontaneous com- 
bustion o-f hair clippings. Yours, L. A. T. 

We can account for the barber-shop fire on the supposition of " red hair;" 
and while G. C. probably burned his fingers fooling with wool and whisky, 
we can't see how wool and water could make a fire. 

No. 37. 

My Dear Sexton:— Your confounded impudent note, printed at that, was duly received. 

Do you think I've nothing else to do than cater to your laziness ; dive and delve among 


personal reminiscences; gather together in statistical form, and present them lucidly 
for you to read off as the result of your brain ? Not much ! "What do you want of cold 
facts? Don't you know we deal in hot facts, and aren't you aware when nothing is left 
but ashes the loss is total? Your very note is the greatest incentive for incendiarism. 
Ain't I firing up; and don't you think the "cause" sufficient provocation? The only good 

thing in your plausible invitation is— please set down — the ass meets next month. 

I'll be with you. M. C. 

That is the last, if not the 

Respectfully submitted. 

Wm. Sexton, 


The President — This report of Mr. Sexton's is thoroughly 
characteristic of the gentleman, and it shows that the Pres- 
dent knew exactly what he was about when he asked him to 
take hold of the subject of "Fires and their Causes." You 
all know about fires and their causes; if you don't, all you 
have to do is to refer to this paper and you have it there, 
I think it but just that a vote of thanks should be tendered 
him for his amusing paper. 

Mr. Chalmers — Mr. Chairman, I desire to introduce to 
you and the Association, Mr. A. S. Murray, the general agent 
of the South British Insurance Company. 

The President — You can introduce him. 

On behalf (to Mr. Murray) of the Association we bid you 

As a matter of form I will say that the reports of Mr. Sex- 
ton and Mr. deVeuve be received and regularly placed on 
file. If I hear no objection they will take that course. 

Mr. Smith — Mr. President, to carry out a suggestion you 
made a moment ago, which I consider a good one, I move 
that a vote of thanks be tendered to Mr. Sexton for his in- 
teresting paper. 

Motion duly recorded. 

Mr. Butler — Mr. President, I got up to second that mo- 
tion with a very few short remarks. I think that we must 


all admit that in the compilation he was very successful, and 
the caustic and pungent remarks made between them 
might be considered most characteristic. I think for a 
sample of real ingenuous coolness it was as big a success as 
ever I have heard read. 

Mr. Grant — I think that under the thinly disguised form 
of a correspondence, Mr. Sexton has given us the product 
of his own mind in his own inimitable way. Any one famil- 
iar with his style will recognize those communications 
as coming from no one but himself. 

Mr. Sexton — Mr. President, if you watched around the 
room when I was reading these replies you would have 
found a blush spreading all around the room as each reply 
was read, and I think the vote of thanks should be accept- 
ed and considered as bestowed by the Association on them- 

On motion a vote of thanks was unanimously carried. 

Mr. Carpenter then read the contents of the Knapsack, 
at the conclusion of which, on motion of Mr. Chalmers, the 
meeting adjourned until to-morrow at half past ten o'clock. 


The following circular was sent out as a reminder that it was necessary to 
have something to fill it with: 

Editorial Front Window, 410 California Street, 

San Francisco, Jan. 25, 1888. 

Dear Sir — Presuming that the work pertaining to the preparation of an- 
nual statements is over, hoping that the figures thereof were full of satisfac- 
tion to all concerned, and that I may now find you in just that good-natured 
mood which may incline you to devote a little time to the filling of the 
Knapsack, I say, "Send along the copy." 

Write it up before the close of the month. Write it with pen or pencil, on 
brown paper or white paper, or unused agency — bond blanks — but get it in. 

Every one to whom this circular is sent can remember some humorous in- 
cident, or some quaint conceit, or some sage suggestion that may have 
achieved existence during the year just closed. Put it down and send it in ! 


Do not wait, thinking yon will make it the subject of a ''labored effort" at 
a later date, for the Knapsack does not aspire to being considered the acme 
of literary perfection or the condensation of universal knowledge. 

While my able predecessors have filled considerable portions of the Knap- 
sack with the choice products of their own brains, I feel that neither time 
nor talent will permit me to follow the precedent thus established, and I 
shall, therefore, content myself with loosening the buckles on the 20th day 
of February and spreading out before the expectant eyes of your comrades a 
repast which shall be generous or meagre, in proportion as you do or do not 
respond liberally to the foregoing appeal. 

Yours respectfully, 

E. W. CARPENTEH, Editor. 


A Knapsack editorial has great advantage over those usually published, 
from the fact that it does not suffer the common fate of its fellows and re- 
main unread. The editor reads it himself, and pours it into the ear of his 
patron, as the waiter did the soup into the ear-horn of the deaf person, 
whether he wants it or not. 

The temptation to write an editorial under such circumstances is excep- 
tionally great, and so you must sit and take it. It will, at all events, teach 
you a practical lesson in resignation, and that is what we all need in our 

If the "other fellow " alienates the affections of a pet broker, and secures 
a choice line of business, we all know how we feel inside, and how we make 
a bee-line for the P. I. U. Office to see what can be done about it, and how 
all our threats of resignation from the Union result in resignation at last. 

If a customer is taken away from us by an agent who explains to him that 
he can never recover anything under the printed conditions of the policy, or 
that we have failed to insert the electric light permit, or to provide that 
goods in show windows are covered, we interview the person who has been 
so " shamefully deceived," and who is " so sorry" that he did not under- 
stand the true situation before, but who has accepted the other policy, and 
it is " too late to change," and then comes resignation again. 

If a claimant wants payment for loss on property that we never insured, 
we say, "Go to glory, if you're headed that way;" but he goes to a lawyer, 
or possibly two; he talks to his friends and the newspaper men; he writes to 
his leading San Francisco creditor; we say we won't pay, but we do— and 
here's resignation again. 

If our companies want facts, year by year, more and more, showing all 
sorts of things about towns on this shore, we kick (in our minds) and men- 
tally roar, then bury them up in statistics galore — just here resignation 
comes in. 

If the compact makes rulings unjust to ourselves, and puts all our plead- 
ings up on the high shelves, we wish the Union was " busted " — gone, we'll 


say, to the elves; yet we swallow the doses, though our stomach rebels — and 
here's where lots of resignation conies in. 

If a man who is buried in business so deep, that he has hardly time for his 
meals or for sleep, runs the Knapsack one trip, he's likely to leap right out of 
the straps, and out of them keep — so here's where my resignation comes in. 


Early last spring a wealthy retired New York merchant, with his family, 
moved into a handsome dwelling, which had been thrown in with some cli- 
mate he had purchased, in a fashionable suburb of Los Angeles. 

Shortly after the family had become settled, they gave a dinner to some 
friends. During the night, or rather the early morning after the dinner 
party, the family were awakened by a loud crash, which had evidently occur, 
red on the first floor of the house. The various members opened their bed- 
room doors in much alarm, but gaming confidence by numbers, and each 
one assuring the other that they were not " frightened a bit," the head of 
the family, with one of the older members, mustered up courage to descend 
the stairs to investigate. 

When they opened the door into the dining-room they found considerable 
smoke in the room, and although no flames, they saw many places on the 
tablecloth, carpet and heavy portieres that were smouldering and smoking. 
They lit the gas and smothered and stamped out all that was burning. The 
room looked as if a whirlwind had struck it, and on the dining-table the 
wreck was complete. 

After the table had been cleared, a heavily embroidered tablecloth had 
been spread, and in the middle had been placed the epergne which had 
graced the table during the dinner. Among all the handsome furnishings of 
this luxurious home there was no article of which the owner was so proud as 
this epergne — heavy with solid silver and much cut-glass of the clearest 
crystal, it was indeed a marvel of the artizan's cunning, and as a work of art 
its value was not to be estimated at the mere sum of $1,200, which repre- 
sented its original cost. 

This beautiful ornament was shattered. Portions of its clear facets were 
seen sparkling in the gaslight all over the room, on the floor and on the fur- 
niture, and of the silver portion of it there was not a piece left in its original 
shape, nor of a size larger than one's thumb. 

The tablecloth, carpet and portieres showed a number of holes burned in 
them, varying in size from an inch in diameter to as large as would be cov- 
ered by a soup plate. 

What had caused this disaster the astonished and frightened family could 
not imagine. They decided, however, to leave everything as it was, and 
have the matter investigated by detectives. 

After breakfast the retired merchant reported the fire to his insurance 
agent. It so happened that the special agent of one of the companies which 


had a policy on the furniture was at Los Angeles, and in the local agent's 
office when he called. 

The special and local accompanied the gentleman in his carriage to his 
home, and the three at once proceeded to the dining room. The special was 
appalled at the sight, for his quick eye took in at a glance that even though 
the fire had been so easily smothered, a heavy loss had been entailed by the 
really complete ruin of the embroidered tableclotb, the Moquet carpet, the 
Turcoman portieres and three embossed leather chairs, to say nothing of the 
epergne, whose value he did not then realize. 

While he was mentally calculating what his company's proportion would 
be of a say $3,000 claim, he was startled by a crash and rattle of the glass- 
ware on the sideboard. 

The three men looked at each other helplessly for a moment; but the 
special broke the silence and reassured the others by at once moving towards 
the sideboard, and saying that whatever the cause of the commotion might 
be it came from under that piece of furniture, as could be plainly seen by 
the smoke which was beginning to curl up around it. 

The three men had to exert their united strength to move the heavy piece 
of furniture, but when they "had done so a remarkable spectacle met their 
gaze. Several holes were burning in the carpet, the back of the sideboard 
and the wall were spattered with blood and gore. The ex-merchant recoiled 
with a cry of horror, but the special and local began to stamp out the fire. 
They noticed peculiar fumes while they were doing this, and after they had 
completed its extinguishment, they began to closely scrutinize the carpet. 
The special uttered an exclamation of surprise, which was instantly followed 
by one from the local, and each at the same instant held up something for 
the other's gaze. What the special held was apparently a rat's tail, and the 
local held up what was undeniably the complete head of a very large rat. 
They were satisfied they had found the source of the blood bespattered on 
the wall, but what it all meant was certainly a puzzle. 

The gentleman of the house had drawn near when the insurance men had 
held up the extreme ends of a rat's anatomy, and during the surmises which 
were being made, he said he doubted if he could ever get his place free from 
rats; they had been the bane of his existence ever since he had moved into 
the house, which was completely overrun with them. 

An idea seemed to strike the special, for he suddenly interrupted the old 
gentleman by asking what means he had employed to rid his house of the 
pests. The ex-merchant replied that they had proved themselves too wary 
for cats or dogs, and too cunning for traps, and they had lately been placing 
poison about the premises — in fact, he knew that some had been placed in 
the very room they were in. He called his butler, who showed a box which 
had contained the poison, " The Ready Rat Eradicator." The special looked 
at it, read the directions and the effect it had on the vermin, and among 
other matter read that it greatly puffed up the animal that ate it, and death 
was due to its bursting the stomach, but this effect was slow in being accom- 


plished; the pain would lead the rats to look for water, and they would there- 
fore leave the house to find it, and die outside. 

The special smelt the inside of the box, but could not detect the peculiar 
odor of the fumes that had been noticed when they moved the sideboard. 
He asked if any other poison had been used, and the butler said he knew the 
coachman had used some around the stable, but whether it was a different 
kind or not he could not say. The coachman was called, aud he said he had 
procured phosphorus, such as he had seen used for squirrels in grain fields. 

A self-satisfied smile came over the special's face— he understood it all; the 
cause of the last night's crash and the explosion under the sideboard but a 
half hour before were both clear to hinu He explained to his astonished 
listeners how using the two different kinds of poison had caused the whole 
trouble — the rats had eaten some of the phosphorus, and had come into the 
house and into the dining-room, and had there taken some of the "Ready 
Rat Eradicator;" then one had been attracted to the table by the fruit or bon- 
bons on the epergne, and while on or near it the " Ready Rat Eradicator " 
had done its deadly work, had blown the rat up, and scattered the phosphorus 
it had swallowed in every direction, burning whatever it came in contact with. 
The force of the explosion was severe, as shown by the complete wreck on 
the dining-room table, and by the breaking and rattling of the glassware on 
the sideboard. There was no doubt but that the special's theory was the 
correct one. 

After the matter had been thoroughly discussed, the special said they had 
better proceed with the adjustment then and there. The old gentleman re- 
plied that ought to be short work as everything was in plaiu sight, and the 
estimate of damage was simply the value of the same things new, and he 
could show his bills for everything, as he had bought them less than two 
months previously. 

The special asked him to get his bills, and as the old gentleman left the 
room he heaved a deep sigh, as the probable cost of the handsome furniture 
would rise up before him; and turn it over in his mind as he would, he felt 
the articles were completely ruined, and he could make only a '* totals for 
them, as they were brand new. The old gentleman returned in a minute or 
two with his bills and also his policies. The special looked them over, put 
some figures down on the back of an envelope, which he took from his in- 
side breast pocket, added them up and saw his total of $3,570; he paused a 
moment, and then told the old ex-merchant he regretted, but he mut>t knock 
off $1,200, the cost of the epergne, as that article was destroyed by explo- 
sion which preceded the fire. The old gentleman looked at him for a mo- 
ment in a pitying kind of away, as if he felt rather sorry for him for making 
such an assertion, but the special accommodatingly opened out each policy 
and pointed out the lines in their printed conditions referring to property 
damaged by explosions. The ex-merchant read, and saw the special had 
taken the right ground, and without further delay they agreed upon the 
billed prices for the furniture, which, less the $1,200, footed up $2,370. 


The three then drove back to the local agent's office, where the special 
filled in the proof of loss blank for his company, and then handed it to the 
retired merchant to read over so he would know just what he was to swear 
to before the local agent, who was a notary public. 

The old gentleman held the paper some time, apparently reading and re- 
reading it; at last the special, who was leaning back in an arm-chair smoking 
a two-bit cigar, asked him if there was anything in the proof which did not 
appear to be in order. 

The old gentleman looked up sharply and said: " Young man, there is 
much truth in the saying * never too old to learn;' an hour ago I learned 
something about fire insurance by your pointing out to me a clause in the 
policies which made me bear a loss of $1,200, and now you hand me a paper 
which I must swear to before I can recover for the damage done to my furni- 
ture. Now this paper I cannot sign, let alone swear to, for I find in it this 
clause: 'The said fire did not originate by any act or procurement on my 
part.' It was certainly my act setting poison for the rats, and had I not 
done so, or rather had I not caused it to be done, the explosion and subse- 
quent loss by the igniting phosphorus would not have occurred. No, no, 
young man, I cannot conscientiously sign that paper. I am too old to go 
back on the truth now; my reputation has always been that 'my word was 
as good as my bond.' This is another point in fire insurance I have learned 
within an hour. It may be a good and profitable business for you to follow, 
but there is nothing in it for me. So I will bid you good day!" and with 
this he walked out of the office and entered his carriage, leaving both special 
and local in a dazed condition. 

The special recovered himself, and taking his cigar from his mouth, blew 
out a cloud of smoke, and exclaimed, " Great Scott! that is the 'heaviest old 
adjustment I ever participated in." 

The local muttered something indistinctly, but the special's sharp ear 
caught the word, ,§ Rats !" 

The following anecdote points a moral, and the particular direction toward 
which it pointed will be recognized when the same item appears in the 
March issue of a prominent Eastern journal. We ar6 under obligations to 
the publishers for a revised proof: 

The Closed Bag, or The Company that Doesn't Advertise, was, or might 
have been, the title of a little story related by C. A. Hewitt at the dinner of 
the Insurance journalists. It ran on this wise: A young farmer heard 
that the citizens of a neighboring town were very fond of green corn, and 
that they would buy all the roasting ears that could be brought to their mar- 
ket; so he picked a large bagful of the finest ears of corn to be found in his 
field, and proceeded to the El Dorado of which he had been told, and all day 
long stood on a corner waiting for customers. None appeared, and he went 
home with his wares, disappointed; but, being a young man of some grit, he 
tried it again the next day, and the next, with like results, and was filled 


with surprise that no one came to buy his corn, and he went home and aired 
his disappointment to his friends, and no one could account for the singular 
and unfortunate results of his enterprise. Still he persisted, and the next 
day a bland and benevolent-looking old gentleman came up to him and said: 
"Young man, I have noticed you standing here dayjafter day as if you had 
something to sell, but your bag has always been tied up so tight that no one 
could see what it was, and I thought I would inquire what you had in your 
bag." The young man was a little disconcerted at the first words of this 
address, but he recovered sufficiently to get full of indignation at the old 
man's impertinent inquiries, and by the time he had finished, blurted out in 
reply: " It's none of your darned business what I've got in my bag ! " 


Portland, Oregon, February 10, 1888. 

To the Editor of The Knapsack — Responding to your kind invitation 
asking all friends of the cause to provide their pro rata of refreshments for 
the Underwriters' feast to be held February 20th, I regret to say that your 
pressing request compels me to admit my poverty. It has been a very hard 
winter up here in this northwest, and I have no "delicacies of the season," 
not even red apples and salmon, that I can send the brethren; and all I have 
to place upon the literary table of the Knapsack are a few old chestnuts, 
which have been kept so long that I fear you will only find here and there a 
good one — maybe none at all, 

Chestnut No. 1. 

Some years ago a "special," book in hand, was making a diagram of 
Lewiston, and going into a China store that was insured in the company he 
represented for $2,500, and seeing a stock of probably $5,000, the following 
conversation ensued: 

Special — John, how much goods you got here; how much cargo? 

Kwong Mow — I done know. What for you want know? 

Special — Me all same as taxee man. 

Kwong Mow — Very lette; not more a tousand dollar. 

Special — Velly good; all ritee, John; you burn up, I pay you tousand'dollar 
— all ritee. 

Kwong Mow — Me too muchee sabe — all same insurance man; hab a cigar? 
Chestnut No. 2. 

All specials and adjusters who have traveled in Oregon in years ago, will 
remember Berry, the cheerful landlord at Junction City (with the best bed- 
room off the parlor, with the thick feather bed that smelt like Florida Water), 
who made up in attention and cheerful words to his guests all that was oth- 
erwise lacking. Berry always kept his property insured, and was very 
anxious to have any additions or improvements approved by visiting insur- 
ance men. So one time your special was met by Berry at the depot, when 
the conversation ran as follows : 


Berry — I want you to come right over and see how safe I have got my 
wash-house arranged in the rear of the hotel. 

The special went with him and found a large kettle nicely set in brick, 
with about two feet of brick chimney, with a stovepipe passing from the 
brick chimney up through a shed roof. 

Special — Why, Berry, this is elegant, nice; very safe, indeed! I did not 
think you had sufficient knowledge of insurance and the fitness of things to 
make everything so absolutely safe! I see you have made but one mistake. 

Berry— What is that? 

Special— You have got your chimney on the wrong end of your stovepipe. 

Berry— You go to hell — and come in and take a drink. 
Chestnut No. 3. 

Some years ago, when the adjuster's clause was more in use than now, a 
fire occurred in Pomeroy. The policy had the adjuster's clause. The ad- 
juster figured up a loss of $150, and his expenses at $155, but told the 
assured that as he wished to make a liberal adjustment and leave him per- 
fectly satisfied, he would throw off the difference of the extra five dollars 
and call it square; and to this day that adjuster seriously insists that it was 
a liberal adjustment, as he could have figured his expenses much higher, but 
somehow the assured don't seem to understand it. He knows he had a 
policy, and knows he had a fire, but does not know where the liberality of 
the adjuster came in. However, he is still keeping that policy as a souvenir 
of that adjuster's generosity — as he threw off the five dollars. The Conecti- 
cut can tell this story much better than I have done. 

Chestnut No. 4. 

Some three years ago a fire occurred in New Mexico to a general merchan- 
dise stock, with damage of several thousand dollars; insurance, $2,000, in a 
California company. The stock was large and many goods saved. The 
local agent, who evidently had had much insurance experience, admitted a 
total loss of the $2,000, but said he must have as many goods as he was 
to pay for, to show the agent of the company when he came up. So he took 
$2,000 worth of the saved goods, secured them safely, then telegraphed 
Cobb, Winie & Co., general agents at Denver, to send up an adjuster, not 
knowing that he himself had made the best adjustment ever reported. For 
further details and proofs, ask the Commercial. 

Chestnut No. 5. 

All the old boys of the profession will remember with feelings of "sore- 
ness " the stage trip from Walla Walla to Boise over the Blue Mountains, 
through Burnt River Canyon, with its heat, holes, roots, ruts, rocks, dust, 
and doubtful grub. Upon one trip the stage load inside consisted of Sheriff 
M. and wife, E..C. Mc and wife, a Mrs. C, and your "Special." We were 
all hungry, tired, and badly bruised, and there had been no conversation for 
an hour, when passing some wild flax by the road side one of the gentlemen 
remarked that the fiber was good to make cloth, another that the seed would 
make linseed oil, a third that the seed was good to get dirt out of your eyes, 


the first that the flour from the seed was good to make poultices, when Mrs. 
C, who so far on the trip had not spoken a word to any one, said with much 
emphasis, "If we had the poultices now I guess we would all know where 
to put them !" 

Chestnut No. 6. 

There is no meat in this chestnut, and I only send it for the benefit of the 
younger boys, to caution them against ever suggesting to any man that he 
came from Missouri. On another Boise City stage trip your special was the 
only passenger. The last day before reaching Boise we took dinner at 3 
o'clock p. M. and supper at 12 o'clock midnight. In going into supper I 
found a six-footer in his sock feet waiting on the tnble. but saw nothing I 
could eat, hungry as I was, so I preferred conversation with mine host, 
which was as follows: 

Special — Stranger, what part of Missouri are you from? 

Landlord (very mad and very gruffly) — I'm not from Missouri. I am 
from Georgia. What made you think I was from Missouri ? 

Special — Because you are drawn out so long at both ends. What regiment 
did you belong to, the 36th Georgia? 

Landlord (madder than ever, and kept getting madder because any man 
thought he was from Missouri) — No, the 28th. 

The driver laid down his knife and fork in boisterous laughter, but your 
special did not laugh, as he was afraid the landlord would use him to carpet 
his floor with; he could have laughed had he been a mile away, and did 
laugh at that distance. It is proper to add that I did not stop upon my re- 
turn. Not that I was afraid, but then the air was better on the outside. I 
have never since this occurrence suggested to any man that he came from 


[Scene— Barber Shop.] — Prosperous Insurance Manager — " Can this be my 
,hat? It feels too small." 

Barber — " Your's sure; but they all get that way when the loss ratio is 
small. Ha! ha!" 

A barkeeper left his profession to become an insurance broker. A fellow 
broker met him one day and said: " Well, Joe, have a beer?" (Scornfully) — 
" I never drink it." "Ah, I forgot; pardon me*. I remember, you prefer 
selling it." 


I once heard a paper read at one of our annual meetings on the subject of 
the '• Influence of Association." At that time it seemed fit and full from 
the point taken. Not long since I listened to a touching story tenderly told, 
and in twilight hours and at various unexpected times thereafter this story 


came and came again, until I realized that it had taken a dwelling-place in 
my mind, so to be free of it I write it away, putting it in the Knapsack like 
a bit of leaven. 

Once there was a man, a laborer. He was not intelligent above his fellows; 
there was nothing commanding in his appearance; he was only a serious, 
sober man, who day after day worked rjatiently, faithfully at his bench, 
going and coming with scarcely a word to any one, and yet there was some- 
thing about him which prevented his comrades from rudely guying him. 

After many days it was whispered that he had a sick boy at home, and 
from time to time he found in his hat when the day's work was done, a bit 
of ribbon, a piece of colored glas-«, a shining pebble, or some such trifle. 
Nothing was said; he understood the intent, and accepted it as quietly as it 
was offered. 

At his approach the profane jest or rough horse-play would stop, and in 
course of time it ceased altogether, and what was formerly a tough gang 
became civil and decent to each other. What they could not see was the 
effect of their small gifts. 

In an attic room, ever in his little bed, was a small, deformed, invalid 
child. Before him on the counterpaue lay spread the ribbon and the glass, 
with which he feebly played. There was no other person about the room, 
and when he heard his father's heavy tread on the creaking stairs a light 
came into his faded eyes and a wan smile played about his wistful lips. Any 
new gift was placed in his thin fingers tenderly, as with a woman's touch. 

As the cold days of winter approa hed the father became more and more 
serious. Deeper lines marked his face; and one day when he carried the form 
of the little child out of the house and over to the graveyard, there followed 
him at a respectful distance every one of his fellow- workmen; they had for- 
feited half a day's pay that they might help to bury the boy they had never 
seen, that they might show sympathy for a man who had never spoken of 
his sorrow. 

Mr. President and gentlemen, there seems to be a subtle " influence of 
association" which is controlled by something besides constitution and 

That the frailties of humanity are not singular to the insurance business 
is below illustrated. At a time when all the railroads were in the pool, I had 
occasion to borrow an electrotype at one of their offices. Accosting a clerk 
I said: " The manager yesterday agreed to let me have a ' cut.' Can I get 
it to-day?'' Sweeping the restricted horizon of his office with a cautious 
eye he eagerly asked, " Where to ?" 


Editor Knapsack — Dear Sir. — As specimens of " Ye Local's " gentle wit, 
even under the most serious and trying circumstances, we hereby enclose two 


verbatim copies of replies received from two of them in answer to our circu- 
lar query letter on water supply and fire department: 

No. 1. 

From what source is your town supplied with water? Heavens. 

Have you cisterns or a reservoir? A bucket. 

Is there a system of pipes and hydrants? Gas pipes. 

What is the pressure? Depends upon the strength of the pump-handle. 

Have you a fire department? No, mam. 

Have you a steam or hand engine? A syringe. 

Have you fire hose and how much? Hain't got none. 

No. 2. , 

From what source is your town supplied with water? Sacramento River, 
filled with catfish. 

Have you cisterns or a reservoir? No. 

Is there a system of pipes and hydrants? Pipes, I think (Meerschanm). 

What is the pressure? Very gentle (when around the waist). 

Have you a fire department? None (there is nothing to burn down). 

Have you a steam or hand engine? No (no cranks to work the engine). 

Have you fire hose and how much? Neither (nothing but garden hose, 
and d— n little of that). 

Now, in the answer we have marked No. 1, we imagine that probably 
"Trusting in God," a bucket, strong pump-handle and syringe were the 
local's strong characteristics and inventory of possessions, and being located 
somewhere between Hog Hollows and Jack Rabbits, his life is a burden to 
him. and we will not feel surprised to hear of his early and sudden demise. 

No. 2 evidently is piscatorily inclined, and addicted to the habit of sitting 
on the banks of the Sacramento river with a meerschaum pipe in his mouth 
and a fishing rod in his hand, there being a sucker on one end of the line. 
That he is an admirer of the fair sex, his remark on " Waist " would imply. 
But we must beg to differ with him as regards " no crank to work the en- 
gine " so long as he is on the ground. That he is located somewhere in 
41 Hades" we also infer from his sulphuric remark on hose and his statement 
"that there is nothing to burn down." 

From all this we deduct therefore the moral: "That business communica- 
tions" to Ye Local corrupt good manners, and should be but jokingly con- 


While traveling through Colorado some little time since, I happened to 
hear of a very good thing in the way of country agents. The story runs 
about like this: 

Some few years ago, in a remote country town having a bank and other 
first-class appendages, with weekly stage communication with the outside 
world, lived a gentleman of considerable intelligence, well known in the 


community, and whose financial reputation was considered excellent. He 
wished to become a full-fledged insurance agent. He thereupon sat dowu 
and wrote to one of the secretaries of an Eastern company, stating what 
his condition was in the town, making reference to the bank as to his finan- 
cial standing and integrity, and requested the agency of the company, be- 
lieving that he could do a good and profitable business. After making in- 
quiry the secretary sent forward supplies, together with commission and a 
batch of policies. 

The special agent who had charge of that particular department was not at 
home at the time, and somehow in the press of business the secretary neg- 
lected to make a memorandum to call the attention of the special to the fact 
that this agent had been appointed, and request that he call upon this 
agent and make full report of the town and other conditions. So the matter 
rested about three years, when probably the supply clerk or some other circum- 
stance called the matter up; and the secretary then requested the special 
when he visited the vicinity to make a call upon this appointed agent and 
ascertain why he had not transacted some business, inasmuch as the promises 
which he originally made were " couleur de rose," and he expected to do 
quite a large and flourishing business. 

So in due time the special visited the agent and after being favorably im- 
pressed with him sat down to ask why he had not done something in the 
way of the insurance business. The agent turned upon him with astonish- 
ment and said: " Why, not do business? My dear man, I have been doing 
business for the last three years; have done a fine business. The prem- 
iums that I have taken in amount to nearly $4,500. I have nearly ex- 
hausted my supply of policies and intended to make^an application for a new 
supply. I cannot understand what you mean by not doing business. Why, 
just sit down here and I will show you the amount of business I have 
done," Whereupon Mr. Special and the agent sat down and went carefully 
over the register; found that he had issued policies in their numerical 
order, all appearing to be in good shape and covering as if he had been an 
old underwriter. 

"And, by the way," said Mr. Agent, "during this time I have made my 
regular deposit of the premiums in the bank, and everything is in good 
form; and in these three years of representing your company I have had 
a few losses, which, of course, has reduced the amount somewhat. I 
will call your attention first to the Smith loss; that was caused by de- 
fective flue. Of course, in my capacity as agent it was necessary that I 
should attend to this matter, and I have done so. I have paid the loss, 
which amounted to $150, and taken receipt therefor. Then there was that 
Brown loss; that was caused by the explosion of an oil lamp. The damage 
amounted to — let me see — $75, yes. Then Jones he had a loss of some $300, 
caused by sparks on the roof. That I paid, so that is all right. Then Jacobs 
had a loss of $200. I never was able to discover what the cause of that 
fire was. At all events, the amount of the losses that I have paid foots up 


$725. Mow, take my commissions off of this business (amounting to $675), 
and there is in the bank to the credit of the company the sum of $3,100. If 
you wish it, I will give you an order for this amount, check it up, and we 
will square the thing and start again." 

The special then wanted to know why Mr. Agent had not made his daily 
reports, and sent copies of endorsements, reports of losses, etc., to the com- 
pany; whereupon he expressed the greatest astonishment to think that it was 
necessary to take any such course. He supposed when he was appointed 
the agent of the company, that he was a little company all by himself; was to 
issue policies, take the premiums, deposit the same in the bank, and 
simply retain his commissions from the same; that the balance of the money 
was to be held in bank subject to the company's order, or to be paid out in 
the event of loss. The question as to whether losses would exceed that 
amount had never entered that agent's head. Of course, after due instruc- 
tion by the special, he left, giving the agent to understand that he would 
send him out a new supply of policies, and at the same time requested that 
hereafter all daily reports of policies issued should be forwarded in due course. 


Not many years ago, and not more than a thousand leagues from this 
place, a certain grasping monopoly determined to gather into its fold three 
bold, audacious companies which had the hardihood to organize and an- 
nounce themselves as "forninst" the monopoly. A committee was dis- 
patched, with instructions to gather them in or "to bust things." An in- 
terview was arranged between this committee and the board of directors of 
one of the companies. From the outset it was evident that if there was 
any one subject upon which the gentlemen comprising the board were 
ignorant it was the business which the company was organized to transact. 
It can easily be imagined that questions the most startling were asked, 
and arguments the most astounding were advanced. One member, of bu- 
colic appearance, said: "As I understand this thing, it will cost this here 
company about $700 a year for its share of the expenses. Now, — (here 
he gave several very cunning winks to the other directors, with an air as 
much as to say, 'See how / get to the meat of the matter') — " what I 
want to know is, what is our share of the divvy s to be?" 


Not having been asked to become a member of one of the committees 
which yearly contribute so much to the comfort of dealers in stationery and 
proprietors of printing establishments, if not to the enjoyment of under- 
writers, I have, after mature consideration, decided to write a paper of my 
own, and have chosen fur my learned contemplation the subject of ripar- 

Riparian is from the Latin word riparius, from ripa, and means pertain- 


ing to the bank of a river. (This definition is for the benefit of the younger 

The above subject is one that has been receiving considerable thought, both 
pro and con, from some of our best statesmen, and is consequently in a most 
execrable state of uncertainty at the present moment ; and since, as the 
author of this paper, I can adjust forever the knotty problem, it is not with- 
out fear and trembling that I give my decision in favor of the old riparian 
law of England. 

I shall endeavor to prove, by actual experience, the fact that rivers belong 
to the land, or that rivers should remain in the channel through which 
they flow, and not be acquired for the use of distant land-owners. You will 
perhaps say that this subject has no value to the special, but that is where 
my experience overreaches you, and why I write with confidence, as the 
following narrative will show. 

While on a visit to the grain fields and the dry air of the San Joaquin 
valley for the benefit of my health, last summer in the month of May, it be- 
came necessary for me to leave the beloved Central Pacific for a short time in 
order to better enjoy the summer air, and incidentally convince the honest 
granger that the Leading Pacific issued the best policy on growing grain. (If 
the editor of the Knapsack will allow this little puff, no charge will be made 
for this paper.) I hired a team at Selma, and was peacefully making my 
way towards Fowler, and, by way of amusement, estimating values of ad- 
joining grain fields, when lo and behold, my innocent soliloquy was inter- 
rupted by the sudden stopping of my conveyance, the miring or the bogging 
of my horses, and the throwing of yours truly into a nice soft mud-hole, 
carrying with him dash-board, whip-socket and traveling sachel — encumb- 
rances that were not desired at the time, but there nevertheless. The ap- 
parent earnest desire of the horses to get ahead, of which I had never before 
suspected them, added greatly to my comfort. I struck head foremost, and 
lodged my cranium in about three feet of mud, and found an excellent head 
rest. I did Fome serious thinking for a few minutes, and then and there 
gave the subject of riparian rights the thoughts they merited; and as the 
muddy place was caused by the overflowed irrigation canal of the Fowler 
Land & Water Co., you can readily see why I decided in favor of riparianism. 
I emerged a muddy but a wiser man — wiser in having soived th^ rip man 
question, and seen the danger ahead to insurance specials if the said law was 
not enforced. 

You may laugh at my predicament, and not as yet see the bearing on the 
insurance question. Let me add a few convincing questions and arguments. 

W T hen anything interferes with the little comfort of the special, should it 
not be removed? When anything interferes with the dignity and appear- 
ance of our exalted position, is it not an enemy of our profession and worthy 
of general condemnation? I say, yes. Now let me ask you seriously, does 
it add to the dignity of an insurance special to be seen by passers-by stand- 
ing with the usual order of things reversed, and his head buried in the mud 


in the place where his other end should be ; and, above all, does it add to his 
comfort? 1 say, no. 

Now, if these are not convincing examples of the danger of general irriga- 
tion to men of our profession, my head must have been injured by coming in 
contact with a little soft mud, and that I will never believe. 

Our business is a business of equity, and the backbone of it all is even 
distribution of matters, and it would not appear fair that cattle of such 
enterprising firms as Miller & Lux and others should barely be allowed suf- 
ficient water to drink, and that a special should get enough to swim in — 
especially as we are not over fond of water, and can find other liquids more 
congenial to our tastes, and would not be in favor of using it to the detri- 
ment of other animals of desire. 

Many other arguments could be advanced to expound the theme before 
us, but enough has been said to pronounce irrigation as an enemy of the 
special, and enough has been written to place upon file a valuable paper to 
the insurance man, and show up a new hazard not before taken into ac- 

Honor is not so much due to him who continually writes upon old and 
known subjects, but more to him who scents danger from afar and informs 
his sleeping comrade in time to avert it. 

No vote of thanks will be accepted ; something more substantial would be 
wanted. These last remarks are confidential. 


My Dear Knapsack— On a recent overland trip I met a merchant who 
had had some fire experience, also some insurance experience which was new 
to me and will bear watching. In addition to his insurance in regular high- 
priced stock companies, he had $20,000 in an individual underwriters' mu- 
tual combination, with a lot of brother merchants in same line, getting to be 
quite common. Upon adjusting the loss he found that he had enough stock 
policies to cover it, and suppressed his mutual policy. No wonder mutual 
insurance is cheaper than stock. Adjusters must keep an eye open for 
"sich." Yours, X. 


The Knapsack, not to be surpassed in enterprise by any non-underwriting 
publication that establishes an insurance picture gallery, when it can make 
it pay, arranged for something elaborate in the way of portraits to appear in 
this ishue. It circulated around among the brethren, inviting them to write 
up their own notices and furnish their pictures, from which patent-process 
engravings were to be prepared at an expense of only $25 each to the orig- 
inals. The engravings, which were to be executed in the East, have unfort- 
unately, on account of the railroad blockade, failed to come to band, but the 
descriptive text, thanks to the promptness of the aforesaid originals, whose 
self-respect would not permit them to be accused of lukewarmness in such a 


case as this, is all ready. It is true that the editor has taken some liberties 
with it — in fact has, in some instances, eliminated the original of said origin- 
als entirely out of sight — but he felt warranted in so doing in consideration of 
the fact that the non-arrival of the engravings causes some apprehension 
that the aforesaid $25 may not be paid unless he puts several extra coats of 
kalsomining and gorgeous coloring upon the text itself. 

The reader will need to conjure up in his mind the most pleasing fancies, 
the most graceful curves, the most ravishing tints, the most noble facial ex- 
pressions, in order that all combined in varying proportions and positions 
may successively reveal to his inner self the pictures of those fellow-under- 
writers whose portraits were found worthy of, but which unfortunately are 
not found, in these columns. To append the names to these pictures when 
^he descriptive text so readily distinguishes them, would be to put "saw- 
buck" under "X" or "ox-yoke" under "B," and so these also are left to the 
keen discernment of the reader. 

[ Cut here ] 

If for the beautiful engraving above given were substituted a blank ex- 
panse of virgin whiteness, the very position which it occupies in this gallery 
would furnish sufficient index to its immediate recognition, for who else but 
the genial, off-hand, ready-to-object-before-you-get-half-through gentleman, 

the honest "Uncle ," should occupy the most prominent place in our 

collection. He represents, as you know, the acrostic combination, an ar- 
rangement which, through a period of some four years, he has patiently 
worked up, until now, by dint of having persuaded one of his companies to 
reinsure and retire from business, he is enabled to "ring in" on the printers 
two advertisements of the leading name while only paying for one. It is the 
only case on record where the veracious Washington ^ave up to Lion. The 
picture, as you will notice, represents most prominently the back and top 
portion of our friend's head. Glancing past the rim of the ear, we observe 
beyond a clean shaven expanse which our subject thought it proper to show 
a little off, just as an intimation that he did upon occasion have his cheek 
with him to fall back upon — for "that's business, you know." But aside 
from this, no portion of the face proper is shown Our friend, being a firm 
believer in phrenology, could not see why such prominence should be given 
in portraits to those organs through which feed and fusil oil are mechanically 
supplied to the stomach; to those organs through which colds relieve them- 
selves; or to those organs which, though called "windows of the soul," are 
as deceptive as a drug store window to the night reveller who impatiently 
waits to hail the red light of the street car " that never comes " 

Bumps are the true indices of a man's character, and here we have tbem. 
See how the qualities of friendship, resting on the spinal column as a base, 
rise up latitudinally and spread out longitudinally, until, like a porous plas- 
ter of love, exhaling its sweet aroma of humanity to all around, they cover 


the entire rear portion of the brain. It is these qualities, uu" locked" by 
nature and unobscuied by art, that we have peculiar facilities for studying 
in the case under consideration. It is these qualities that induce "Uncle 

" to always give the assured the best end of the bargain, to let him 

have his own way concerning the value of the hay, even if, at a later period 
of adjustment, and after having secured the confidence of the party adjusted, 
it becomes necessary to "play for even " by deducting the present "boom" 
value of the land from the purchase price, in order to ascertain the value of 
the barn that recently stood upon it. 

The very fairly developed bump of firmness near the top of the head is in- 
dicative of a disposition as inflexible as the Sexton rule, and our intercourse 
with the subject assures us that we may always know just where to find 
him. The place where the bump of veneration belongs, near the pole of the 
globe under examination, is suggestive of the Holmes hole theory, so marked 
is the depression. A precedent may be as ancient as the practice of allowing 
rebates, but our friend is not overawed by it in the least. He asks, just the 
same, "Why not?" and "What for?" That is the reason he knows so 
much. But we will not dwell longer upon this portrait. The original is 
sitting before us, and those on the back seats can complete their craniologi- 
cal studies while we invite the attention of the others to the next picture of 
the series. 

[ Cut again ] 

This is a F. F. — i. e., full-face — and especially a full-forehead view. This 
is a head for you — ahead of all competitors — a leading Pacific Coaster face, 
with eyes (I's) always first for insurance, with ears for grain reports, with 
nose (noes) for bad business, and with lips for smiles which the most callous 
special cannot withstand, much less the local agent. It is said that many 
years since, when his duties called him much to the country, the benign 
halo which surrounds his features got him into no end of trouble, since he 
was so frequently taken for an expert on the fire hazard of the hereafter that 
people fled from him, supposing that the innocent diagram sheet upon which 
he was so industriously noting openings and fire walls was a subscription 
paper. But now that he has nothing to do but to stay at home and tell a 
stenographer pretty things to say to the agents, and sign his name and punch 
an electric bell for a clerk whenever he wants one, his constant association 
with the ungodly relieves him of the mortification previously experienced. 
You have all met him. You feel as he engages you in conversation — as he 
wishes you a merry good morning and extends the hand of greeting — that 
the grasp of his subject is wonderful. It makes a deep impression upon 
you; you feel that among underwriters he takes the palm. But next time 
you meet him you feel that you may want to use the palm again yourself 
sometimes, so you waive the previous ceremony, and instead throw up be- 
fore him in the air a graceful, double-fisted Chinese salutation. He is sup- 
posed to be the original inspiration which incited the poet to trace the line, 


"He's a jolly good fellow " — and he didn't take any poetic license when he 
did it. 

[ Cut three ] 

You all supposed this picture would come in second, but here it is — 
"George the Third '' — a man who possesses such rare ability for combining 
wit with serious thought, and social courtesies with earnestness of purpose, 
that he is gladly recognized as the monarch of many a merry gathering. He 
enjoys life as it passes along, and makes all those around him happy. As he 
travels on the Pullman cars, the dusky dusters of the dusty dusters see that 
his clothes are kept clean; the sable soup-server at the seaside sanitarium 
sees that none of the viands named in the caravansary schedule have suffer- 
ed depreciation; the stage-driver saves him a seat on the box and tells him 
the names of his horses; the soulless street car corporations, or at least one 
of them, has "N. B. & M." painted upon its vehicles; the beefsteak, mutton- 
chop and ham fiend of the country tavern gives an extra mauling to the 
meat when it is to test the teeth and distress the stomach of our popular 
friend; and even the political orator shows his respect for him when he 
commences his most impassioned sentences with a reference to "God 

[ Cut fourth ] 

This is the picture of the man that invented the Knapsack. The serious 
expression on his face is indicative of the remorse which he feels at ever 
having committed such an act. He has repented, he has cut loose from it, 
but the result of his crime still lives, and year after year it stalks ghostly 
forth at the annual meetings of this Association to cast a gloom over all their 
proceedings. He has invented some other things which have not been so 
disastrous in their results; for instance, a rule for the adjustment of non- 
concurrent policies, which makes A company and B company pay just what 
they ought to, and brings C company up with a round turn, if it tries to 
sneak. Judging from the record of his office — an institution that not only 
wants the "Globe," but two big cities "thrown in" besides — he must 
also have invented some mysterious success-securer, the details of which he 
keeps secret from the profession. Such of his time as is not required by 
his inventions he gives to the Grand Army of the Republic, excepting a 
small fraction which is devoted to insurance, in order solely that he may be 
eligible to membership in this Association. It isn't every man than can 
gain, deserve and keep the reputation of being a first-class underwriter at an 
expense of so little time. Perhaps the secret is in the fact that in whatever 
he does he is "terribly in earnest," he talks to convince, he works to ac- 
complish, he carries with him those with whom he comes in contact. This 
is where, in this whole matter, the meat — or to use a more distinctive 
simile, the kernel — comes in. 


[ Cut fifth ] 

Synonym of success — "Win." That the name given him at his birth was 
prophetic of the future is best evidenced by the fact that he has been made 
President of this Association, and to what higher honor can a man attain! 
General disgust with all candidates may elect a coroner, a "dollar limit" 
game may decide the selection of a mayor, a Swift written letter, hastily re- 
pented, may determine the gubernatorial question, while demagogueism, 
rum, political trickery, and the unpardonable sin of mugwumpism may set- 
tle the quadrennial fight for the chief magistracy of a nation whose freedom 
is fast running to license — but in the case of this Association it is merit, the 
esteem of his fellow-underwriters, the worthiness to be their leader, that 
places the subject of our sketch in the presidential chair. Calm, dignified, 
courteous, even tempered, and with a friendly feeling for all his brethren 
unsurpassed by that of any underwriter upon the Coast, he deserves the 
success which his name suggests, and the honor which you have conferred 
upon him. 

[ Cut 6—2%— full length ] 

The picture on the opposite page is that of the longest known underwriter 
on the Coast, and that is the reason why we were compelled to take an en- 
tire page for it. The subject would not, to our surprise, consent to a "bust" 
in this instance, claiming that only a full length exhibit, which would show 
that the final footing of both his supporting columns balanced, would satisfy 
his principles (principals), and that he should deduct 25 per cent, deprecia- 
tion for every twelve inches of his anatomy that did not show up in the 
" proofs " which he required to be submitted. We told him this would 
bring us out in debt, but he said that was nothing — he had had "lots of 
cases of that kind " — so we had to submit. For a person of his years, the 
subject of our sketch is the most expert adjuster on the Coast. We have 
been told that he is thirty-five years old, but he doesn't look it. Whatever 
his age, he has an old head — a head that can figure the lie (lye) right out of 
a pile of ashes, and show a dishonest claimant the amount of salvage in half 
the time required by many adjusters to convince the assured that the pre- 
mium for the unexpired term ought not to be returned under a policy which 
has just paid a total loss. His persuasive ways are something remarkable. 
When he says, "Don't you see?" and sways his long body backward and 
raises his index finger, and looks beamingly into your eye with a self-satisfied 
air, as if to say, "I must have convinced you," you feel that to say "No " 
would be to admit your stupidity, so you look as innocent as the rose in his 
button-hole, and meekly answer, "Yes." This is the way the loss- claimants 
do, and afterwards wish they had legs as long as his to kick themselves all 
over the country with. We will admit that the above remarks are to a great 
extent dictated by what seems to be the custom. It is the fashion to crit- 
icise certain pictures in certain ways, but that is no reason for believing half 


that is said about them. We do not, for instance, believe that our friend, 
when asked to pay for a scorched front of a newly constructed store, charged 
up the difference between dry and green lumber to the assured, and calmly 
demanded the balance. We do not believe — well, lots of funny stories that 
are "laid to " him as regularly as all the jokes of the day were at one time 
attributed to Abe Lincoln. But there is no doubt about it that he does suc- 
ceed in holding a dishonest loss claimant pretty nearly even, and that is 
what an adjuster is for. 

[Cut ] 

"Well, now," we think we hear you say, "if we want any more 'cuts' 
we can make them ourselves. We all of us know more about 'cutting' than 
the editor of the Knapsack, anyway." Well, probably you do; probably we 
have become over-confident of our abilities on account of some recent com- 
ments made by Manager Stillman upon our work; probably we have not yet 
reached to that degree of true art which is the concealment of art, bat we 
are willing to learn, and hope in time to emulate the most skillful among 
you, and to make cuts that will look like reflections from the mirror of truth 
itself — cuts which will not reveal the trace of any sharp instrument, even 
when viewed through the strongest glass of a compact regulation. 

We venture to hope that, notwithstanding our inexperience, the cuts 
herewith presented may compare favorably with those which are soon to be 
issued by a rival publication, and that we may be able to collect our $25 
each from the persons honored. 


It is said "there is a pleasure in the pathless wood." Some of us who 
are familiar with the average American forest (the pathless forest in particu- 
lar) might reasonably doubt this statement. We have equally reliable in- 
formation that "there is joy in heaven over one sinner who returns;" but 
even this assertion might not impress us all, as I fancy there are some here 
who, if they attempted to associate any such rejoicing with their own per- 
sonal case, would be compelled to look upon it as a most distant and im- 
probable event. 

But the wild joy which the "field man" experiences as he seizes his 
" grip" and hies him away into the country is a present, positive and estab- 
lished fact. During his stay at home he has been compelled to sleep upon 
spring beds and hair mattresses, with clean sheets and woolen blankets to 
make his nights a burden to him; while the dreadful quiet of his surrround- 
ings has caused the drowsy god to refuse him (like some coy maid) the 
shelter of his arms. While the nights have thus refused him the solace they 
should bring, the days have filled his mind with care. He has hastened 
down to the office late in the forenoon and left it regretfully soon after 


lunch. His meals, too, have been served with the most monotonous regu- 
larity; his food has been of such a non-fibrous and unresisting character that 
the muscles of his jaw have become weakened from lack of their accustomed 
exercise; and the water he has had to drink has been clear— absolutely clear. 
But as he treads upon the corns of everybody about him, while struggling 
for a ticket at the depot, he feels that life is once more opening out into 
measureless vistas before him. Boarding the train he sinks into a luxurious 
reverie and thinks "with a great glad smile" how for many days he will now 
be breathing the familiar dust of travel and washing it down with all sorts 
of alkali and copperas and seepage waters. His mouth moistens and his 
stomach yearns as he looks forward to the coming meals of indestructible 
beefsteaks, withered vegetables and water-proof pastry. Already he seems 
to feel the broken springs of a pulu bed beneath him; and he grows drowsy 
and nods while the familiar sounds of a barroom fight seem to be beard be- 
neath him, and faint and peculiar sounds of human life come to him from 
adjoining cloth-lined rooms. He hears the heavy and irregular tread of fel- 
lows who are stumbling about the dark hall in search of their rooms; and he 
awakes with a start at the cry of "tickets," to hug himself with delight as 
he thinks all these pleasures are before him for weeks and perhaps for 
months to come. 


Dear Knapsack — Did it ever occur to you that while some people are born 
honest and upright, others are compelled to have integrity pumped into 
them by force? Do you, Mr. Editor, "who doeth all things well," appre- 
ciate the constant worry that it is to some who are members of the P. I. U., 
as they find they are unable to get the better of their confreres by some lit- 
tle contrivance of their own that borders on dishonesty; how their body and 
mind become tattered and torn in their various endeavors to "whip the 
devil round the stump?" No, I don't suppose you do, and lots of others do^ 
not; but some can, when I tell you that in the struggle for business they 
shave so close, that the barbarous Stillman sometimes brings blood when he 
imposes his fines and reprimands and makes honest men of those who were 
once fearless in their funny ways, and the bravest of the rate-cutters be- 
come timid, nervous men. I am led to say this just now, as day before yes- 
terday I picked up the following on California street, which so depicts a 
tale of trouble that I have thought it worthy of The Knapsack. 

Truly yours, Veteran. 


I never was a timid man, I'm a pugilist by birth, 

1 always hated nervousness more than anything on earth; 

I've bragged about my fearlessness when I was in my prime, 

But of my change I'll tell you now, and tell it all in rhyme. 

So if you will attentive be, I'll do the best I can, 

To tell you of the sorrows of a timid, nervous man. 



I've battled with Old Ocean and fought all thro' the War; 

I've been whipped by Johnny Sullivan and never got a scar; 

I've gone down in a diving bell and up in a balloon, 

I've twinkled with the other stars, and sailed around the moon; 

I never once was rattled, but now I've changed say plan, 

For I'm full of woes and sorrows— I'm a timid, nervous man. 

I've read about the engineer who threw the lever back 

"When he saw a headlight on the curve, and but a single track; 

The boy upon the burning deck;— all were cowards along o' me — 

Till I got a lively company, and took its agency. 

I assumed to be an honest man and keep my skirts so clear 

That Stillman couldn't catch me, and then I'd have no fear. 

Now what has made this awful change — for I'm not writing stuff — 

What is the fearful trouble that makes me such a muff ? 

It's only that I want to keep my premiums at the top, 

My expenses at the minimum— my losses I must stop; 

I want to get the business at any rate I can, 

But Stillman and the " Union " make me a nervous man. 

I've tried to smuggle stables through, as dwellings for a beast, 
For if it only could be done thus premiums are increased. 
The cheerful, rusty stovepipe, and cotton hanging loose, 
I try to cover as I may, but it really is no use; 
For Stillman and his horrid ways, his fines and reprimand, 
Have made me what I am to-day — a timid, nervous man. 

So I'm nervous, I'm timid — a timid, nervous man ; 

I've got to leave a business that makes a timid honest man. 


The following story, sent us from the East, has nothing to do with insur- 
ance or matters on this Coast, but being written in a humorous vein may 
serve to amuse you. It is entitled 


I was born bad; my parents gave me a bad name; the boys call me Dam 
Bad for short, and I like it. What's the good of being good, anyhow? Now 
I go to school when I don't play hookey, and it maks me tired to see them 
good boys studying away for dear life, afraid to look up or whisper, or throw 
a paper wad, the teacher is all the time watching them so sharp, just hoping 
he may catch one of them so as to make an example of him. You betcher, 
when I prance in I make things howl, and it would amuse you to see how 
the teacher has to be wiping his spectacles, or blowing his nose, or reg- 
ulating the stove, or fixing the window just that minute! He knows I'm 
bad, but he don't want to see the proof of it, for it would take all his time 
lickin' me if he treated me as he does the good boys, and he darsn't try that, 
for he knows I would bust up the school if he did. 

I don't mind telling you that the school was started for the express pur- 
pose of keeping me quiet. You see, I always did make things pretty 


lively in our neck of the woods, cutting up and down (principally down), 
getting in on the apple orchards in a loose and independent style, running 
a free lance into the biggest watermelons, and " sapping the vitality" of 
fresh laid eggs in a way that made the other fellows wonder what they 
had been born for, anyway. So the folks started the school, and they sent 
a committee of boys that they thought would have some influence with me, 
because they were the worst boys they could think of except me, and they 
begged me to join in, and told me how much happier we would all be if I 
would put my name down on the list of scholars. You'd have laughed 
if you could have seen the style I put on when that committee showed 
up. I told 'em that I had a contract for a, term of years to rob henroosts 
for a city poultry dealer; that come what might, my commission merchant 
must have his regular supply of fruit and melons, and that they knew 
what that meant, and that under my physician's instructions I would be 
compelled to suck eggs all my life. Do you know this didn't phase 'em 
a bit? They just said: " Baddie (they called me 'Baddie'), we'll twist the 
rules anyway to suit you, and give you exclusive privileges in the par- 
ticular directions which you have mentioned, if you will only come in." 

Well, it seemed to me as if this last proposition looked like business, as 
it gave me a sort of dead thing on the melon and orchard and henroost 
business all to myself, for if one of the goody-goody milksops should ever 
get up courage to try his hand in my line, he would be barred out. But I 
didn't let on that I was the least bit willing to join. So they kept coming and 
coming and coming, and telling me how anxious every one was that " that 
Dam Badlam should come into the fold." They agreed to have a teacher that 
used to be a "free lance" himself, and that would sympathize with me, 
and would see that the good boys didn't pick up any of the stray apples 
when I shook the trees; and they agreed to make a rule that if any boy left 
the school, the whole thing was busted, so this, you see, made me "cock 
of the walk," for they all know they must treat me mighty fine to keep me in, 
for I'm bad, with a big " B." 

You ought to come around some day and visit the "CornpatchJSchool." 
''Cornpatch" is the common name for it, but when we want to be high- 
toned we call it the Polytechnic Interior University, and some of the boys 
have gold pins with P. I. U. on them, but I just think that carving the 
letters on the watermelons I pick out is good enough for me. 

It is as good as a circus to see the good boys try to live up to the rules. 
They start in and think they are going right, then first thing they know 
they run slap up against something that means different from what it reads, 
and then they get licked, and then they start again, and are certain they are 
right, when the master makes a rule for that " train and trip only," as the 
railroad tickets say, and then they get licked, and finally they get rattled 
and don't know what to do, and don't do anything, and then they get 
licked, and then when they see me pulling down the corners of my eyes 
at them, as they lay across the master's knee, it makes 'em feel happy. 


I just had great fun the other day with a putty-blower, and hit the 
teacher with it. It gave him a pain in his eye, but the putty was there to 
glaze it with, so guess it was all right. (This is a joke). The Boardruan 
boy hit a fly with a potato-blower, and you ought to see what a whaling he 
got. He blubbered out that that Dam Bad boy had not been punished for 
using his putty-blower, but the master said his ruling was that there was 
no similarity between potatoes and putty, and that the latter had nothing 
to do with the case. He was lucky he didn't get whaled again, for the teacher 
could just as easy made another ruling that would have given him one. 

I told the teacher one day that if I were one of the other boys I wouldn't 
stand it. He said that they had to stand it, and it was no more than right 
that they should; they were born good, and had been familiar with rules 
and regulations all their lives. "Do you suppose," said he, "that an un- 
tutored child of nature, an Apache Indian, who whoops up and down the 
main street of a city, clothed in nothing but his war paint and a scalping 
knife, is to be treated the same as a good young dude that walks totteringly 
along in a stylish costume, and with an oversized penknife in his vest 
pocket ? Not much. The latter must be ' run in ' for carrying a concealed 
weapon, while the former must be conciliated, must be furnished with 
scalps fixed up to order from the nearest hairdresser, must be provided 
with warm blood from the most convenient slaughter house, and every pre- 
caution must be taken that nothing be done to excite his anger in a way 
which would interfere with his ultimate civilization. " So it is in your case," 
said the teacher, "and I shall always rule that the boys that are good by in- 
stinct and education must toe the mark to a hair, but that the greatest 
leniency must be shown to one as depraved as yourself. In fact, my dear 
Baddie," he said, "I make it a point to lick the other boys as often as I can, 
as an evidence to you of good faith, and as a proof to the trustees that I am 
a strict disciplinarian." 

Let me know what day you can come around to the P. I. U. and I will 
put some of the other boys up to being brave, and making them think they 
can do the same as I, and then you can see them get licked. 


San Francisco, February 14, 1888. 
My Dear Knapsack — Being in durance vile, I was enabled, through the 
kindly offices of an uncontaminated friend, to receive your pertinent invita- 
tion ■■ to get something in, either on brown or white paper, or any unused 
agency-bond-blank." This I can assure you has never been used, but for fear 
some of my confreres might object to reading the same, I have had it doubly 
medicated. I regret exceedingly not being able to appear in your midst and 
listen to the words of humor, wit and pathos, but small -pox is an odioue 
disease, though in my case not fatal so far, and ere long I hope to appear in 


my accustomed place, with face as smooth as the cranial development of our 
worthy member of the "fire associates," demonstrating a scientific fact hith- 
erto unknown in medical practice, that small -pox pits have no apparent 
effect on the cheek of ye special. 

Some funny things have occurred here, and many things of a most heart- 
rending nature, but as this is the time when business, tempered with expe- 
rience and good-will, abounds among our fraternity, I forbear to burden jou 
with the "humor" and only allow your thoughts to dwell on "bovine mat- 
ter." The "points" I've been enabled to glean 1 lay before you. 

When I was received into this pestilential abode, my delirium precluded 
me from recognizing the habitues, but as I began to convalesce I was sur- 
prised to find so many of our honored profession. My first recollection is 
in seeing Mayor Pond, though completely muffled in oilskins, with a face 
and hands as greasy as a Kamtchatkan after a blubber feast, "pottering" 
around the premises, evidently with the intent of writing up the same for 
the Sun, of which he is a director. Truly a company displaying such enter- 
prise should not fall under the fine-atical rule of the compact. 

The popular president of the million-dollar company, who entertains all 
the boys at the annual meeting, I was sorry to see in such a place, but mis- 
ery conjures up strange fancies. It seems as if I could hear him repeat in 
his delirium, "Give the boys a chance." 

The manager of the " three link company " lay next an Odd Fellow. 
They were exchanging points, and agreed their combination was the strong- 
est in the world. 

The president, vice-president and secretary of the Anglo - Maniac were 
holding a secret session, being nearly convalescent, for the purpose of find- 
ing out what they should do with their surplus. I was called away before it 
was settled. 

All these and many more were confined and carefully guarded from the 
outer world. One thing, though, I could not understand, why so many 
country agents were roaming round the yard. I supposed their respective 
pest houses took care of them; but yet here they were, and to my wander- 
ing fancies they did not seem to mind it much. Far graver were my 
thoughts; the anxiety that preyed on my diseased mind; the horrible 
weight that oppressed me; the sufferings my family would undergo, not 
knowing my whereabouts, for I left home with "grip " well packed for the 
boom country, and knew not how many days I had been confined in this 
polluted atmosphere. I importuned, I implored for pen and paper. Mis- 
ery was depicted on my countenance. My tongue clove to the roof of my 
mouth, and madness like a funeral pall was slowly but surely capping my 
brain. At this moment I felt the wee hands of my little daughter reaching 
out from her crib, saying, "Papa, you're making an awfu' noise wis your 
nose; I tant sleep." 



San Francisco, February 21st, 1888. 

Pursuant to the adjournment of yesterday, the pro- 
ceedings of the annual meeting were resumed at 10:30 A. M. 
this day. 

After the meeting had been called to order by the presi- 
dent, J. W. Staples, the roll of members was called and a 
quorum being found present the session was resumed. 

The President — The first thing on the programme this 
morning will be an address from the Vice-President, Mr. 
W. L. Chalmers. 

Mr. W. L. Chalmers — I am down on the programme to- 
day for an address. What I have to say is not in the shape 
of an address by a long way. It is only a short story that 
may give food for reflection to some of our managers and 


Mr. President and Gentlemen of the Fire Underwiters' Association— 
As the lawyers often say in court when trying cases, I was taken by surprise 
yesterday when on looking at the programme I found my name down for an 
address to be delivered at the beginning of the second day's proceedings 
of the association. I had teen grateful to our president for leaving me se- 
verely alone when appointing the various committees for the year, but 
I feel anything but grateful now when at the eleventh hour I find I 
am expected to say something — subject not named. 

Now, the questions which presented themselves to my mind were: Was 
there time to prepare an address such as I should not be ashamed of? Second, 
What should be the subject of that address? After thinking the matter 
over I decided to shirk the duty — the more so because I really did not 
know what to speak about. The key-note for a subject, however, was 
struck by the secretary in his report when he referred to the death of one 
of our members, the late John M. Thompson. I remembered that last year 
our deceased friend promised us a paper on a subject which had not been 
touched on at auy of our meetings, viz: "The advantages of the bureau 


system of adjusting fire losses." That paper never carne to light; it was 
lost somewhere on the road between Southern California and this city dur- 
ing the storms which prevailed at this time last year. 

It is a subject of vast importance to our business, and as some glaring 
cases of extraordinary heavy adjusting expenses have developed during the 
past year, I shall occupy a few minutes of your time in discussing this 
subject, tut in a very informal and cursory manner. 

I understand that such bureaus have been established in New York 
and Chicago, and perhaps elsewhere, the work performed being to furnish 
first-class adjusters to any company or companies having a loss anywhere 
within their own particular stamping ground, the charge being, as I have 
been informed, $15 to $25 a day and expenses. A loss occurs at some 
distant town; half a dozen or more offices are interested, and they get a man 
from the bureau instead of each sending its own special, thus reducing the 
<50st of adjusting to a minimum. 

Now we all know that here on this Coast nearly every agency or com- 
pany has one or two— some of them three or four — specials, many of these 
gentlemen receiving large salaries, and it therefore becomes the first thought 
of their employers how to secure enough out of the adjusting fees to help 
pay these salaries, losing sight altogether of the fact that their companies 
have to pay so much more than had the adjustment been intrusted to, say 
one or two, instead of half a dozen or more, as is too often done by us. Gen- 
tlemen now here in the room can remember several cases of the kind within 
the past year 

Without exactly locating these cases, I will refer to three which came 
under my notice: one in Northern California, one in San Francisco, and 
one in Southern California. 

In the first case the insurance amounted to $45,000; the loss was adjusted 
by eight specials after seven days' work. It is true some of the gentlemen 
did not do much work, preferring to preserve an attitude of "innocuous des- 
uetude," but they put in their bills all the same. Eight men, railroad fares 
at say $12 each, $96; hotel bills, eight men, seven days, $3 a day, $336; 
eight men seven days, at $15 a day, $840 total, $1,272. 

Second case, in San Francisco ; insurance, $23,000. Nine men adjusting 
fee for ten days at $15.00— $1,350. 

Third case, Southern California ; insurance, $94,000. Nine men in this 
<3ase. I was not present, but one of the adjusters who participated in the 
adjustment went very carefully over the figures with me and they ran up 
to over $2,500. The loss occupied nearly three weeks in adjusting. 

Please note that the above does not include the appraising fees or any- 
thing other than the fees and expenses of the adjusters. 

Now let us think for a moment. The first case could have been easily 
handled at the most by two men at an expense of, say, $418, a clear saving 
of $854. The second case, in San Francisco, could have been handled by one 
man at an expense of, say, $150, a clear gain of $1,200. These two losses 


were settled by appraisement and the adjusters had not much to do. Case 
three, in Southern California, was not settled by appraisement, and there was 
a great deal of work connected with it ; but I venture to say that four good 
men out of the nine could have settled the loss at an expense not to exceed 
say, $1,500, thus gaining $1,000. 

" Fun for the boys but death to the frogs." 

An adjusting bureau established on this Coast would save the companies- 
such heavy bills. But passing from this part of my subject, there is s^ill 
another great advantage to be gained by the establishment of such an in- 
stitution here. 

Every paper we hear read at our annual gatherings on the subject of 
" losses and adjustments," refers very pointedly to the interference of 
brokers, creditors and the Board of Trade in the settlement of losses. No 
matter how fraudulent a claim may be, these gentlemen insist upon pay- 
ment to the last cent. When the adjuster kicks, as he but too often 
finds occasion to do, off goes the claimant's friends to the managers or 
general agents, telling them all kinds of tales, and so bother and worry these 
gentlemen that they often back down for the fear of perhaps losing a few 
premiums, and take the settlement out of the hands of the adjusters. We 
can all recollect such cases. 

Establish a bureau of the kind I now advocate and when in walks Mr. 
Creditor or Broker with his story, simply say "the matter is entirely out 
of our hands and you must take your grievances to the adjusting bureau, 
who will do what is equitable in the matter." 

The very short time allowed me to prepare this paper prevents my going 
as fully into this important subject as I should have liked and as it deserves. 
I trust that some one more able than I am will look the matter up during the 
year, and at our next annual meeting give us a paper on the subject more 
worthy of consideration than the few hasty thoughts now presented. 

Before concluding I will offer one suggestion, and that is, keep your specials 

in the field where they ought to be, inspecting — weeding out bad or 

doubtful risks, thereby preventing losses, instead of calling them off to 

adjust any loss that may come along in which you happen to be interested. 

Kespe-tfully submitted. 

W. L. Chalmers. 

The President — I have no apology to make in reference 
to the remarks of Mr. Chalmers. It simply shows that I 
did just right in holding off any notification to him until 
the last minute, for we have got some very interesting re- 
marks from Mr. Chalmers, and if I had given him a year we 
probably might have had an address on a different subject, 
very finely couched in good language, but it would not have 


been an address on this subject which is very interesting, 
and is very important. I think when he takes the presi- 
dential seat next year he will have a chance to appoint some 
person to take charge of this very subject and see whether 
there is hot an opportunity of bringing out some excellent 

Mr. Sexton — This is a matter that I have given consider- 
able thought to. Mr. Chalmers has taken the popular side 
of the subject. He speaks of nine men being on an adjust- 
ment where five could do the work. He forgets that four 
were learning something which would benefit their compan- 
ies at some future day. The old men teach the young men, 
so I think there is a compensation there which he 
did not mention. This matter of "adjusting bureaus" 
might work very well in large cities where a lot of mana- 
gers took stock in the bureau, then hire a competent man 
to take charge of it, paying him a good salary — it is a 
comfortable place — then when a loss occurs anywhere, that 
manager will telegraph to a local agent or special who hap- 
pens to be in the neighborhood and pay the local or special 
$10 a day for adjusting the loss, and charge the companies 
$20 and divide the profits among the stockholders. This is 
the other side of it. I may be wrong, but it is well to watch 
both sides. 

The President — Is there any one else who desires to speak 
on this subject? 

The next paper will be a paper by Mr. Bernard Faymon- 
ville on 


Mr. President and Gentlemen of the Fire Underwriters' Association — 
In presenting this subject I shall be obliged to confine myself as much 
as possible to such of its causes and effects as may relate to insurance 
business, for its scope is a vast one, and to trace it in all its ramificatious 
would require more time and research than I have been able to devote to 
it. It is as broad as the universe itself, as there are but few things which 
are not burdened with some vice or hazard peculiarly their own. 


The subject of proper vice is by no means one of only recent attention. 
It is mentioned in the Rules of Amsterdam made in 1598, wherein, however, 
it relates to subjects of marine and not fire insurance. The bearings of 
proper vice on insurance are also dealt with in other ancient writings, among 
them the Guidon de la Mer, a French work on marine contracts. Emerigon, 
in his admirable work, treats of proper vice and quotes ancient laws and 
regulations written in the tenth century. 

Then what is proper vice? That question has been before me ever since 
our worthy president saw fit to place upon me the duty of an swering it. 

Groping in the mist and obscurity which still surrounds the subject, we 
encounter two separate species of vice, both of which have their distinctive 
features, and both of which are important in their bearings on our busi- 
ness as insurers. For the purposes of consideration we will designate the 
first as 


This consists of that peculiar natural tendency to decay and deterioration 
which is found domiciled in nearly all organic matter. It includes such 
causes of damage as are represented by spontaneous combustion without 
external influence, the spoiling, spotting, discoloration, corrosion or shrink- 
age of any chemically constituted substance, either liquid or solid, resulting 
from the effects of climatic, elementary, or other natural changes upon 
the native qualities of the substance itself. In fact, it includes many 
causes of damage and deterioration not related to the insurance business, 
except in so far as they may be the means of reducing values. In this 
case the vice, or, to use the insurance phrase, the " hazard," which creates 
the damage is intrinsic or proprietary to the subject — it belongs there — is 
placed there by nature, and is in no way of accidental origin. 

The second species we will name 


and embraces the susceptibility of artificial bodies to damage from being 
put to the uses and purposes for which they are intended ; the natural con- 
sequence of the service for which a thing is designed. As examples of this 
vice we may mention the injury done to chimneys, stoves and fire places 
by the heat generated therein ; the damage done to lamps by reason of their 
own flame ; the darkening of walls and frescoes, and even damage to fur- 
niture, occasioned by the smoke or soot created by gas jets, lamps, or 
heating apparatus while performing their usual functions, or the injury done 
to dynamos and electric wires by being charged with electricity beyond their 
carrying capacity. 

In the first instance the vice is an endowment of providence, and in the 
second instance it is the secondary effect of a premeditated act. In either 
case the damage and destruction may be slow, but it is sure, and day by day 
the value of the property, to which it attaches, is impaired by its operation. 
These vices first appear as an element of deprecietion, often developing into 


a cause of fire, and not infrequently terminate as the basis for a loss claim. 
Now the question arises, Where does our liability as insurers in such cases 
begin, and where does it end? We may premise by repeating the well-known 
maxim that accident must be the primary element of a valid loss claim, but it 
is by no means an accepted principle that all accidental fires are proper loss 

The results of some premeditated act, or the operations of some naturally 
endowed quality, are the essential components of proper vice, and it may 
therefore be safely laid down as a rule that the immediate effects thereof are 
not within the scope of ordinary policies of rnsurance. It must be borne in 
mind, however, that the direct effects of proper vice are often the cause of 
subsequent accidental damage, for which we are liable in so far as it pertains 
to the objects so subsequently destroyed or damaged. 

I recall a peculiar case which fell to my lot for adjustment some five years 
ago. The claimant resided in a southern town and was in the habit of heat- 
ing the rooms of his dwelling with an ordinary coal oil burner. On the 
morning of the accident the burner was placed in the parlor and lighted. 
Everything appearing safe, the lady of the house went about her duties, but 
shortly after became aware of the presence of coal oil soot in the various 
rooms. Going to the parlor she found the oil burner all ablaze and the 
room full of oil smudge and smoke. With great presence of mind, and 
with no little risk to her personal safety, she picked up the whole outfit and 
carried it into the yard, then returned and ventilated the dwelling. Scarcely 
five minutes later., on looking out of the window, she noticed that the laundry, 
a small building detached from the dwelling, was afire, and then realized 
that in her haste and excitement she had placed the burning oil stove dan- 
gerously near said building, with the result stated. The claim on my com- 
pany which soon followed included the price of the stove, smoke damage to 
the drapery, carpets and furniture, and for the laundry building. 

Here was a case which had the elements of both proper vice and accidental 
loss. Naturally enough it was contended on behalf of the assured that the 
fire became accidental the moment the flame of the burner assumed larger 
proportions than was intended. This position was hardly tenable, however, 
as under that rule insurers would be liable to pay for nearly all the stoves 
in the country, as very few, if any, of them are not at some time or 
other during their existence unintentionally overcharged with fuel and 
are thus damaged or rendered useless. 

I settled this loss upon a basis which, after further thought and investi- 
gation, has in my mind crystalized itself into a 

That the fire insurer's liability for loss or damage by proper vice begins only when the 
fire communicates to objects other than the one in which it originates. Such communica- 
tion must be attended by ignition, and any direct loss or damage caused to or by the article 
to which the fire so communicates is within the scope of the policy. 


Under this rule the claimant referred to received pay for his out-house, 
but not for the stove, nor for the smoke damage to the drapery or furni- 
ture; for nothing aside from the stove itself, the domicile of the proper vice, 
had been ignited, and it was natural and proper that there should be combus- 
tion there. The smoke and soot which occasioned the damage resulted from 
no accidental fire, and were not chargeable to the company. Had the fire 
of the stove, however, ignited some adjacent, independent object, the company 
would have been liable for the damage done to and by the burning of said ob- 
ject, and also for the damage done by the smoke arising therefrom. 

Now as to the liability of insurers for damage resulting from proper vice I 
find various authorities. Concerning " intrinsic proper vice" we quote 
Emerigon, Section 9. page 311, where he says, *' Losses proceeding from the 
proper vice of the subject and its intrinsic nature ex vitio rei et intrinseca ejus 
natura, are not at the charge of insurers." In other words, the insurers are 
not liable for losses sustained through or on account of the proper vice of 
the subject insured. Nor is this rule a mere conjecture on the part of 
Emerigon, for he bases the same on the decisions of the Guidon and the 
Kules of Amsterdam. In this view of the matter Emerigon is also sustained 
by Valin, a noted French authority on insurance, who, in his commentaries 
written about the year 1720, says, "Insurers are responsible only for such 

damages as happen through casual or unavoidable accident, but 

an accident is not that which happens through the defects or perishable 
nature of the thing insured." The principle laid down by these writers 
seems to have obtained general adoption, and, I think, is too well settled to 
need further discussion. 

Kelating to the liability of insurers for losses occasioned by "extrinsic 
proper vice," I find authorities more modern than those above cited. Prob- 
ably the most competent of these is the decision of Judge Dallas in the case 
of Austin v. Drew, reported in Volume 6, Taunt., page 436, and which decis- 
ion is also referred to and discussed in Volume 10, Cushings' Mass. Reports, 
page 356. The points in this case, in brief, are about as follows: 

A sugar refinery was provided with the usual furnace, the chimney of which 
extended through successive stories of the building above the roof. Over 
the top of the chimney was mechanically arranged an iron regulator or dam- 
per, which was operated from the furnace room. On the morning when the 
damage occurred the party whose duty it was to attend the furnace had, 
through negligence or inadvertence, failed to open the damper, the result 
being that the smoke and heat which would otherwise have escaped up 
the chimney worked its way through the sides of the chimney into the up- 
per stories, damaging a great quantity of sugar by overheating and smoke. 
The owners demanded indemnity from the insurance companies, claiming 
that they had sustained a loss by fire. 

Judge Dallas, in rendering his decision in favor of the companies, says: 
" There was nothing on fire which ought not to have been on fire, and the 
loss was occasioned by the carelessness of the plaintiffs them selves." Com- 


meriting on the same case, Phillips, an English authority on insurance, says: 
* 'The damage was occasioned by the unskillful management of the machinery, 
and not by any of those accideuts from which the defendants intended to in- 
demnify the plaintiffs." 

Ellis, in his work on insurance, page 25, says: "In order to recover upon 
a policy against loss or damage by fire, it is not sufficient to show that the 
property has been damaged by the heat of fires usually employed in manu- 
facturing, and incurred by the negligence of the insured or his servants, be- 
yond its usual intensity." 

Beaumont also deals with the question of proper vice, on page 37 of his 
work, and says: 

" Where a chemist, artisan or manufacturer employs fire as a mechanical 
agent, or as an instrument of art or fabrication, and the article which is thus 
purposely subjected to the action of fire is damaged in the process by unskill- 
fulness of the operator and his mismanagement of heat as an agent or instru- 
ment of manufacture, there is not a loss within a fire policy." 

These authorities would seem to sustain the rule laid down by the writer, 
at least to such a degree as they apply thereto, and any propositions ad- 
vanced in said rule not covered by said authorities must be accepted by my 
hearers only to the extent that the author's opinion may give them weight. 

Now, as the subject of proper vice is one which will admit of such elobor- 

ate treatment that you would have no time to listen to, nor I the ability to 

so present it, I will content myself with submitting the foregoing superficial 

remarks for your consideration meantime, thanking you for your attention. 

Respectfully submitted. 

Bernard Faymonville. 

Col. Kinne — Before we pass to some other subject,I would 
like to ask the gentleman who wrote that paper, what he 
would consider the vice of a lamp if it exploded. Would 
the lamp have to be paid for by the company? There has 
been a most excellent paper read to us by him, but at the 
same time I would like to carry it out a little further, as to 
the overheating of the stove and the wear and tear incident 
thereto. If a lamp explodes and sets fire to a cover on the 
table which might cost six bits or $5, would the lamp itself 
be a natural or proper vice. We might say they should 
purchase better oil, but the lamp has exploded. Would 
that be a proper item for a loss claim? That question has 
come up two or three times. 

Mr. Faymonville — I do not think the company would be 


liable for the lamp, but it would be for the table cloth that 
you speak of. 

Mr. Kinne — I am asking about the lamp. 

Mr. Faymonville — Not by any authority that I can find. 
When the lamp explodes, the fire which causes the explo- 
sion is premeditated. The liability of the insurance com- 
pany begins only at the moment that the fire leaves the dom- 
icile of the proper vice. The fire insurance liability for 
loss or damage caused, by proper vice, begins only where 
the fire communicates to other things, and I think that this 
rule covers the case. 

Rule : 

That the fire insurer's liability for loss or damage by proper vice begins 
only when the fire communicates to objects other than the one in which it 
originates. Such communication must be attended by ignition, and any direct 
loss or damage caused to or by the article to which the fire so communicates 
is within the scope of the policy. 

The smoke arising from the flame of a lamp, when the 
flame is larger than it should be, I do not think can be 
charged to the insurance companies any more than the lamp 
itself can be. I do not believe that the explosion of a lamp 
caused by fire that is within it, is a proper charge against the 
company, but the moment the fire leaves the lamp and com- 
municates to anything beyond it, the liability of the com- 
pany commences, and we are not only liable for the damage 
done to the object itself but for the smoke arising from 
such independent object. 

Col. Kinne — I am glad to hear that explanation. It has 
always been the Kinne rule. But at the same time some 
offices, for the sake of getting a little notoriety or custom 
to themselves, have been in the habit of admitting a claim 
for the lamp as the object that caused the fire. Now I think 
that is one object that these meetings are held and organized 
for, that is to get together, if possible, and establish a rule 
of understanding that certain things are right and certain 
other things are wrong. Then we could act alike in those 


matters. It may be but a trifling matter of $2.50 or even 
$20 for a lamp, but it is not the amount involved but the 
principle. If it is right let us pay them, and if it is not 
right don't let us pay them. I have held that the lamp 
should not be paid for, although it may cause a great deal 
of trouble afterwards. I made these remarks as I wanted 
to bring out somewhat more definitely the thoughts that 
had been given by our secretary. 

Mr. Faymonville — I will state that I have tried to draw 
the line where the company's liability begins and where it 
ends. I have looked up authorities on the subject, and I 
have consulted with others, who have older heads than my 
own, and I think from what I have found out, after investi- 
gating the subject, that my rule — which is a personal rule, 
and I do not lay it down as the rule of the association — is 
the correct one ; at all events, I am ready to contend that 
the lamp should not be paid for under those circumstances. 

Mr. L. B. Edwards — It occurs to me that there is a pro- 
vision in almost all of our policies to that effect; I believe 
our policies cover the point that we are not responsible for 
loss by explosion unless fire occurs, and then for the damage 
by fire only. That would imply that we are responsible 
only for the fire caused by the explosion, and not for the 

Mr. Faymonville — That clause would not cover the case 
which I cited. There was no explosion, simply the coal oil 
stove had over-heated itself; the flame had grown to pro- 
portions not intended. There was no explosion. It was 
hot enough to spoil the stove, and at the same time created 
smoke enough to damage the curtains and furniture for 
which the insured wanted pay. As Col. Kinne says, some 
would have allowed it, but I did not. It was a matter of 
several hundred dollars, and not merely the value of the 
lamp. I did not believe it was a proper item to allow, for 
the flame had not left the lamp. 


The President — I hope that some of you gentlemen will 
remember this at our future meetings and get up a discus- 
sion upon it, as it is a very important subject. Are any of 
the members of the committee present on " Legislation 
and Taxation?" The members of the committee are H. E. 
Mann, A. J. Bryant, J. D. Bailey. As they do not appear 
to be present we will ask Mr. Dornin, who is now present, 
to speak on " Losses and Adjustments." 

Mr. George D. Dornin— That request reminds me of one 
of our esteemed friends not now actively engaged in busi- 
ness, who was unexpectedly called to speak at a meeting 
held at Sacramento. He started in, in rather an embarrassed 
manner, offering an apology for his lack of knowledge of 
the honors to be conferred upon him. It was entirely un- 
expected, and what few remarks he had to make must be 
upon the spur of the moment. When just getting at a 
point where he had forgotten just exactly what he was to 
say he put his hand in his pocket behind him and pulled 
out a roll of paper. Like my friend, I have come entirely 
unprepared for anything whatever, and I want to offer as 
ample an apology as I can, and to say that I think the choice 
of myself as chairman of this committee is exceedingly un- 
fortunate; unfortunate in this respect, that what I know 
now about losses and adjustments is confined altogether to 
footing up the losses on the register from month to month 
and measuring the percentage of loss. As to the details, I 
leave that largely to my colleagues, who are much more 
familiar with the devious ways of the assured than I am. 
I wish I knew more about them, but I don't; and when the 
president called my attention to the fact, a few days since, 
that I was one of the committee and chairman of the com- 
mittee on Losses and Adjustments, and was expected to pre- 
pare a paper, I was taken by surprise. It is a fact that I 
was. I thought that the work of the Association came 
upon the men who were in the field, and not on us who have 


easy and comfortable positions, occupying comfortable 
chairs, with no other labor than the drawing of our salaries 
each month. I thought that we were entitled to be over- 

If you will take this for an apology for what I have not 
done, and ask Mr. Bromwell and Mr. Z. P. Clark to help us 
out, I will promise you that I will not do so again; that is, 
I will not be put in a position to offer an apology when 
called upon. I believe there is more meat in some of the 
papers presented to this Association by the active men than 
I think you can force out of what you might call the vet- 
erans. If there is anything that worries me — not in the 
daytime, for then I have something else to think of, but 
at night when I wake up — it is what I ought to do. I some- 
times wonder whether the sins of omission, which do not 
stare us in the face, for at night we cannot see, but appear 
like mountains, are not the greatest of our sins. I did intend 
to prepare a paper — I thought of it once or twice, and it 
worried me in the night — and I promise that I won't come 
before this Association again in an apologetic mood. 

The President — You have heard the remarks of Mr. 
Dornin upon his failure to prepare a paper. Most of us 
will regret that Mr. Dornin did not know positively he was 
on this committee early in the season, for from the few 
words of apology, and for his reputation for getting up 
papers of this kind, we all know what he could have done 
if he had tried; and it is a matter of regret that he did not 
know a little earlier in the session and give us the benefit 
of some experience that we know would have been very 
valuable to us in the profession. 

Mr. Dornin — The remarks of the President make me very 
glad that I came up and offered an apology. I would not 
have got that compliment if I had not. 

Col. Kinne— That may do for to-day, but how about a 
a speech for to-night. Is that already prepared ? 


The President — I think that is all right. Mr. Grant, will 
you kindly read the paper which you have in your hand. 
The paper which Mr. Grant is asked to read now is from 
Mr. Geo. Piatt of the California Insurance Company. 

Mr. Geo. Grant — I will read to you this paper, which has 
just been handed to me. I have hardly got the sense of 
it, as 1 may say, but I hope to do it justice. It is dated 
Oakland, Feb. 15th, and called 


The writer presents this paper to the association influenced solely by the 
hope that the few stray thoughts herein set forth, though not new or orig- 
inal, may at least have the respectful consideration of some of the gentle- 
men who pass on the business of their companies, which is placed before 
them day after day throughout the year; that some of the hard working, 
thoughtful special agents may throw the weight of their influence on the side 
of correct principles in the profession of underwriting; that there may be 
more certain intention practically emphasized in our business and less expe- 
diency, for does not intention oftentimes wait on expediency, and is not the 
former, in our contracts of insurance, conspicuous by its absence? 

Do the gentlemen who have charge of the different offices, with full au- 
thority to accept or reject risks as offered, exercise a proper care or endeavor 
to correct the evils which are so apparent and at the same time so burden- 
some to the companies? Do they even attempt it, or have their convictions 
and their perceptions become paralyzed by familiarity with the evil — or do 
they hesitate to tackle a job so stupendous and apparently void of good re- 
sults, or has indifference given place to former watchfulness? 

Do the specials, when visiting their agents and inspecting their business, 
pretend to criticize unfavorably the wording of the policies, to point out the 
ambiguous sentences, to protest against the unusual privileges granted the 
assured, and that, too, without rhyme or reason, and which, in many in- 
stances, voids the conditions of the policy — conditions which experience has 
taught are essential for the protection of the company? We imagine that in 
the great majority of cases they do not. 

Why should the agent be allowed to commit blunders which, if he were a 
clerk in any one of your offices, would call down upon him a sharp rebuke, 
with an admonition to be more careful in the future and not repeat the of- 
fense? Why do you encourage him in his wrong doing to his detriment 
and your expense? 

We are of the opinion that individually we are a good deal like the man 
who never votes, and, for a reason, always consoles himself with the thought 
that he alone cannot undertake to save the country, and his vote really 


makes very little difference with the result either way. Vain delusion! He 
might, if he would, have the consciousness of having done his duty, regard- 
less of the action of others. 

If we were guided and influenced by this principle of doing our duty at all 
times, would it not lead up to that which we all must desire, to-wit, concerted 
action, unity of purpose, emphasizing principles which, if clearly defined 
and insisted upon, would compel the respect of both the agent and the insur- 
ing public, and raise the profession from the dead level of mediocrity, incon- 
sistency and stagnating demoralization, and at the same time acquit our- 
selves of the charge that our business is all guess-work, luck — what you will; 
that method or exactness cuts no figure in the scheme. 

If in unity there is strength, certainly concert of action is what is most 
needed among the companies, that our faults may be corrected, rather than 
that we should be obliged to apologize continually for our shortcomings, or 
leave ourselves open to the charge of being too intent on personal advance- 
ment, without reference to the effect our actions may hiave on our compet- 
itors or the profession of underwriting. There are few of us but will readily 
admit that harmony ought to prevail in our ranks; that on general proposi- 
tions there should be well-established precedents, but it is noticeable that 
the questions arising, common though they be, are usually settled in a man- 
ner most advantageous to a particular office, and without regard to others 
who may be equally interested. 

Is it necessary, or is it good for the business, that we permit concurrent 
other insurance without limit, on a little retail dry^goods stock in a country 
town, or on a saloon-keeper's stock, or on a building, or on any movable 
or immovable thing, whose value does not fluctuate materially during the 
term of the insurance? That's an incentive to a dishonest assured to take 
advantage of the companies, to commit a crime, and must necessarily sub- 
ject the business of insurance to public censure, and justly so. Does the 
privilege add to your premium income, and is it any advantage to an honest 

Is it expediency that impels us to waive one of the most important condi- 
tions of our policy by allowing the owner of a special hazard, and whom we 
insure, to run over time, without specifying any particular hour; to shut 
down and remain idle without notice to the company and permission granted 
therefor, indorsed on the policy? That's where we either lack backbone or 
our greed for premiums gets the better of our judgment, and the beacon 
lights of experience are unheeded and our craft goes on to the rocks and 
loss is the result. 

It is only at the end of the year, when striking our balance, we wonder why 
our loss ra*io is so elevated; but wonder and reflect as we rnay, there is al- 
ways a good reason for it, though we may be loath to admit it. 

Is it an unreasonable request on the part of the company to insist that the 
assured, when asking the protection of the policy on several articles of a 
similar kind, such as horses, vehicles, pictures, gallons of wine, should be 


required to stipulate a limit as to the amount that shall be claimed on 
any one, that the word "et cetera" be eliminated from the contract, that the 
occupancy of the building insured be stated in the policy, so that we may 
know exactly what we are covering and liable for, and at the same' time bo 
enabled to make use of our classification table and form an intelligent opin- 
ion of the hazard? 

Is it a reflection on the underwriter to be told that his is the only office- 
which makes these requirements, and at the same time be stigmatized as a. 
"kicker "? We fancy not. 

Is it reasonable to expect the assured to pay his premium in coin or by 
note, or within thirty days or six months, or at all? There can be but one 
opinion as to the absolute necessity of a company's promptly paying an 
honest loss occurring under its policy; public opinion and the courts, when 
called upon, accelerate the adjustment and payment of a loss; but the dear 
public, unhappily, does not express an opinion on the subject of an assured's 
prompt payment of his premium, and the efficacy of the courts as a medium 
for asserting corporate rights, or in gaining redress, are too well known 
among underwriters to offer much hope or encouragement in that quarter. 
Is this not then a subject for the companies to act upon in concert ? 

Is not a long credit for premiums practically a rebate to the assured? I& 
not the acceptance of a note in payment of a premium a violation of the 
spirit of the compact, and is it not taking an unfair advantage of those offices 
who refuse to thus prostitute and belittle the value of their policies by ped- 
dling them in so unbusinesslike and undignified a manner? We think this 
question within the province of the P. I. U., and ought to be regulated and 
controlled by that body. 

The courts have decided that insurance is not an article of commerce; it 
is, however, now recognized as a positive business necessity and a most im- 
portant factor in commercial transactions, but unfortunately not governed 
by the law of supply and demand. It then rests with the companies to so 
conduct their business that it shall command the respect of the insuring 
public, and the company that succeeds in most conspicuously doing that, 
will create a demand for its policies as well as its stock. 

Respectfully, GEO. C PRATT. 

The President — The paper has given us a number of con- 
undrums that are worth looking into in the future, and pos- 
sibly under the next year's regime it might be well to classify 
that paper and take the subjects up. Mr. George F. Ashton 
will now read the report of the committee on Fire Depart- 
ment and Water Supplies. 

Mr. George F. Ashton then read the following paper: 



Mr. Pbesident and Gentlemen — In view of the many able and interesting 
Teports from former committees, my associate and myself have prepared, as 
our report, a table in condensed form, giving statistics gathered to the best 
of our ability of the fire department and water supply of California towns. 
Owing to an unusual pressure of office and private business upon both of us, 
we have not been able to make this table as complete as we would have 
liked, but present it as our committee report, hoping that it may be useful 
in printed form to keep for reference, and trusting to our successors to con- 
tinue and improve on it, if approved by the association. This much for the 
committee. Permit me to briefly report on my own account. 

In regard to fire department, I have had opportunities to observe, in my 
brief experience in the field, the working of the departments in Sacramento, 
Stockton, Chico, Red Bluff, Visalia and Los Angeles. 

In Sacramento, everything seemed to be done with promptness, system 
discipline and good judgment. 

In Stockton the department was promptly on the scene and worked will 
ingly and well, but there seemed to be a tendency to smash things generally 
and to drown out the premises unnecessarily, and this fault has been no 
ticeable in every case where I have been called upon to settle a loss. How 
ever, the city has just adopted the paid system, and probably this trouble 
will be in a great measure obviated. 

At Chico and Visalia, more especially in the latter place, the chief trouble 
seemed to lie in the want of practice on the part of the companies. This fault 
is one which from our standpoint as underwriters is a very difficult and not 
Teally desirable one to remedy, but it does seem that it might be overcome 
to a great extent by more regular and thorough drills and by discouraging 
the system of joining fire companies for the sole purpose of escaping jury 
duty. I presume that the remarks in regard to these towns will apply to 
most of our country towns. 

At Los Angeles, though, the firemen worked well when on the ground, and 
the fire seemed to be handled with judgment, there appeared to be a needless 
lapse of time after the alarm before they were at the scene of the fire, so that 
the total destruction of the building was the result. Perhaps this was una- 
voidable, but as I have heard the same criticism from others and in regard 
io other fires, it seems that there must be at least a shadow of truth in it. 

But, for delay in starting out and for apparent apathy, which seemed to 
pervade not only the fire department but every one else, commend me to 
Red Bluff, and I thought to myself that if there was as much indifference 
shown on other occasions as I witnessed, it was no wonder that the town 
had made such a record as a " hot " one. 

In our own city the impression has been formed, at least among a great 
number of those with whom I have conversed, that in the handling of a tire 
which occurs in the frame portion our department cannot be excelled, but 
that when one of our large brick buildings takes fire they do not seem quite 


equal to the emergency. Perhaps this may be attributed to the lack of ap- 
pliances for extinguishing such fires, the necessity for such apparatus never 
having been felt until recently, and it may be owing in a great measure to 
the fact that in most cases the fire has started at sucn an hour that, on ac- 
count of the buildings being so tightly closed, and their situations being in 
a part of the city unfrequented at that time, it had gained such headway be- 
fore discovered that it was beyond human control. Then, too, much of the 
fault has to be laid at the door of faulty construction of elevator shafts, stair- 
ways, etc. Much is claimed for the recently patented appliance for automat- 
ically closing elevator shafts, but not having had a sufficient opportunity to 
observe its workings, I am not prepared to pronounce on its usefulness. It 
has appeared to me that, in their capacity as fire wardens, the fire department 
officers are somewhat neglectful of their duties, my attention having been 
directed only a few days ago to a well known building where a large number 
of persons are employed, whose only means of escape in case of fire is one 
narrow stairway, so that it seems as if loss of life, or at least maimed bodies, 
must be the result should one occur, and this is not a solitary case. It also 
seems that strict laws should be enacted forbidding the construction of build- 
ings so that the stairway winds around the elevator shaft, as is so commonly 
the case, the whole forming one large chimney and furnishing the best of op- 
portunity for the flames to cut off all exit from or access to the burning 

A few words now on the second heading, "Water Supply," and "what-a 
supply" it is in some places! Pardon the pun, Mr. Pre>ident, as it is not 
claimed as original, but you will find it in the first number of the "Knap- 
sack," published by Col. Kinne in the ark. What he was doing there is a 
mystery, since, to judge from the records, there was more demand for ma- 
rine than for fire adjusters just then. However, it is a well established fact 
that the "Lion" was there. It is therefore pretty certain that Brother 
Sexton was there to look after its interests. Here may be found a possible 
solution of the old question as to who came first from the ark, Noah being 
recorded as coming M forth " Now, it seems more than likely that the two 
gentlemen named, with perhaps a representative of the Firemans Fund, were 
the three who preceded the old navigator, and he doubtless found on his ar- 
rival on the summit of Ararat that there were already established agencies 
there. It is interesting to know that these gentlemen obtained such emi- 
nence thus early in the world's history. Excuse any little anachronisms, 
but they are needed to complete my theory. 

But to return to the point. The only points where I can recall anything 
worthy of note in this particular are Martinez, Fresno and Cloverdale. At 
Martinez a supply has been introduced from a private reservoir, with a good 
pressure, and distributed through the principal streets with mains of a fair 

At Fresno the old mains, which were ridiculously small, have been replaced 
by those of considerable size; hydrants, which a few months ago were piled 
on the street corner, have been set to the number of twenty or more, thus* 


affording, in connection with the purchase of additional fire apparatus, 
much-needed protection against fire in this place. 

At Cloverdale a good water supply, with a fair allowance of hydrants, has 
taken the place of a dozen buckets hung on the fence. 

Merced will soon enjoy the benefits to be derived from the newly-completed 
reservoir, covering a surface equal to one squaie mile, with a depth of sixty 
feet and an elevation of ninety feet. 

D. M. Bokee. 

Note.— The " table in condensed form" referred to in the foregoing report, 
not being fully completed, has, at the request of Mr. Thomas, been omitted. 

The President — Before we proceed further I wish to in- 
troduce to you Col. Carr, of St. Helena, a local agent of 
the "Sun." We wish to bid him welcome to the Associa- 

On motion of Mr. Chalmers, the meeting was then ad- 
journed till 1:30 p. M. 

The President — Before you retire I have one thing to 
mention which I came nearly forgetting. Mr. Spencer says 
that he has received two copies of replies to this dinner in 
blank, not signed. Evidently some one has sent them, for- 
getting to attach their signature. He does not know w r ho 
they came from, as they were all in electric pen writing, and 
the envelope is the same; there is nothing to show from 
whom they came. I will therefore suggest that you go in and 
see Mr. Spencer, and see if your own name is down for the din- 
ner, and if there are those who have not replied who desire to 
be present, they can put their names down at once, that the 
chairman of the committee may know how many we can 

The meeting then adjourned until 1 :30 P. M. 


February 21st, 1888. 
The Association assembled at 2 P. M., and the afternoon 
proceedings were as follows : 


The President — We will now listen to the report from the 
Chairman on Statistics, Mr. W. H. Lowden. 

Mr. Smith— It seems to me that we had better postpone 
this paper a few minutes, to give others an opportunity to 
hear it. 

The President — We have already postponed it for half an 

Mr. Smith — Those who do not hear the paper will much 
regret it. 

The President — That is my opinion, and so I have taken 
it upon myself to delay the regular order of business to this 
late hour. 

Mr. Smith — Let us postpone it for ten minutes longer. 

The President — We cannot; it is time, and we must pro- 

Mr. W. H. Lowden then read the Eeport on Statistics. 


Mr. President and Gentlemen — An examination of the previous reports 
made to this association by the committees on statistics shows that the plan 
of tabulating the figures was first adopted by Mr. Carpenter in 1879, and he 
carried the tables back as far as possible, viz.: to 1875, that being the first 
year in our history in which the amount of premiums on San Francisco 
business was obtainable. 

These tables become more valuable with each succeeding year, and as their 
adoption has been unanimous since the date above mentioned, the present 
committee not only cheerfully adheres to the plan but heartily recom- 
mends its continuance. 

The result of the combined efforts of the underwriters in California during 
1887 in their never ending conflict with king loss and his army, the as- 
sured, will be found in the following tables: 



State Business— Showing Amounts Written by the Various Companies, with Pre- 
miums Received Thereon, Average Rate, and Percentage of Losses to Premi- 
ums, 1887. 








$ 84,007,735 

$1,381,697 14 
1,909,634 33 
2,299,022 42 



$447,381 43 
734,315 46 
919,785 63 




Foreign . . » 




$5,590,353 89 


$2,101,482 52 


Amount of Fire Insurance Premiums, and Per Cent, of Sums Received by Each 
Class of Companies. 











$909,757 46 
1,219,883 36 
1,256,967 11 

$3,386,607 93 


$471,939 68 

689,750 97 

l,042 r 055 31 


$1,381,697 14 
1,909,634 33 
2,299,022 42 




$2,203,745 96 

$5,590,353 89 

Compared with the previous years, 1887 has been a successful one in this 
State. The figures show an increase of $ 404,583 in premiums and a decrease 
of $552,889 in losses from the totals of 1886. It is true that 1886 was not 
much of a year to boast of; the loss ratio had run up to 51.18 (which was 
higher than the average of the past seventeen years by 5.72), in spite of an 
increase from 1.60 in 1855 to 1.68 in 1886 in the average rate obtained. The 
excessive loss ratio in 1886 was chargeable in some degree to tbe extraordinary 
losses in San Francisco, which in that year exceeded the average by 28.27. 
This only goes to prove that when it is not one thing it is another, and so 
long as the uncontrollable power of loss is an element in the prosperity or 
adversity of underwriters, there is nothing certain in the results unless we 
bet, and even then we are liable to lose. 

We find in segregating the figures that California companies obtained an 
average rate on their business in 1887 of 1.64, Eastern companies 1.76, and 
foreign companies 1.69, the loss ratios showing up as follows: California 
companies 32.38, Eastern 38.45, and foreign an even 40 percent. The aver- 
age rate obtained on all the business written in California was 1.71, an 
increase of three cents over 1886, the loss ratio being 37.59, a decrease from 
the results of 1886 of 13.59. A further division of the figures show that the 
premiums on State business, exclusive of San Francisco, went into 
the coffers of the various classes of companies in the following proportion: 
California 27 per cent., Eastern 36 per cent., and foreign 37 per cent., while 
the city premiums were absorbed as follows: California 22 per cent., East- 
ern 31 per cent., and foreign 47 per cent.; the totals for both city and State 



averaging 25 per cent, to California companies, 35 to Eastern, and 40 to 

In looking back over the reports on statistics made from time to time to this 
association, it occurred to this portion of your committee that everything 
was favorable to a glance over the results obtained in the years gone by, and 
that perhaps such a retrospective survey would not be altogether valueless in 
shaping the course of future events in our field; at any rate, if nothing more 
came of it than the advantage of having the figures in condensed form for 
ready reference by carrying them forward and classifying them, I felt that 
even this would pay for the labor involved. 










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Acting upon this idea, I have gone back over the figures in each case to 
such dates as reliable statistics could be found, and have prepared a 
series of tables, and diagrams illustrating them, to which your attention is 

The lessons drawn from these tables are not considered by any means ex- 



haustive; and in placing before you the experience of tire insurance com- 
panies in California for the past seventeen years in a condensed and graphic 
form, I hope for one thing, viz: that abler minds than mine will draw 
lessons from them which will result in permanent good to the business and 
be a barrier in the way of those inclined to break away from the restraints 
now surrounding us. 

Diagram No. 2. Showing variation of percentage of Losses to Premiums. California business. 




















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The subject of an adequate rate for the risk assumed is as vital in fire as 
it is in life insurance, but the difficulties in our case as compared with 
those met by the life actuary in estimating this adequate rate are very 


much greater. They would be much nearer equal if epidemics were as 
frequent as conflagrations, and the moral hazard were eliminated from the 
risks we accept. However, we are not destitute of material for arriving at 
an approximate equation, and if this material is put in proper shape, it only 
remains for experts to figure the results and the companies to act upon them, 
if our business is to be anything more than a grand system of gambling. 







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The first table to which your attention is called is one that is governed 
entirely by our lord and master, loss. Every other detail of our business is 
controllable except this. Rate, commission and general expense can be 
raised or lowered at will — the fire waste remains unconquered. Yesterday 



it encouraged a reduction in rates and a return to loose practices by a low 
loss ratio; to-morrow it will ruin companies by the dozen who have fogotten 
its jower. 

Table of California Business for Seventeen Years — Illustrated by Diagrams 

Nos. 1, 2 and 3. 







































































































































This table is based upon the amount written (less re-insurances and can- 
cellations) by the companies doing business in California from year to year 
since 1871. I had hoped to be able to present this to you on a basis of the in- 
surable value of property in the State, and through the kindness of the sec- 
retary of the State Board of Equalization the figures were procured, but an 
examination proved their worthlessness for the purpose. The different 
methods adopted in assessing property values from year to year, particularly 
at the time the new Constitution took effect, rendered these estimates 
untrustworthy, and caused a return to the basis of risks covered by the 
companies; perhaps, however, we are not far from the truth, as keen com- 
petition keeps the amount written pretty close on the heels of increased 

In 1871 we find the fire waste on insured property to have been sixty-five 
cents on the hundred dollars, as shown by diagram No. 1, which was twelve 
and a half cents above the average of the seventeen years. In the following 
year, without apparent rhyme or reason, it fell to thirty-three cents. For the 
ten years from 1872 to 1881 we had a period of comparative enjoyment, with 
just enough variation in the monotony to keep us awake. In 1882, however, 
an advance is made to sixty cents, and in 1884 a decline to forty-four 
cents, as if the king had gone into seclusion and training for his grand 
efforts in 1885 and 1886, in which latter year all former figures were eclipsed. 
The loss to amount written reached eighty-six cents, and I leave you to figure 


ont where we would have been at the end of that year if rates had not been 
just what they were. We find a comfortable falling off in 1887 to sixty-four 
cents, but even this is much above the average, and can hardly be consid- 
ered a safe index as to which way the line will point in 1888. The only 
conclusion we can draw from this is, that the ratio of loss to amount written 
is a very uncertain quantity, and such being the case, it is surely the part of 
wisdom to be prepared for any emergency. 

We will leave this table for a time and return to it later, when a curious if 
not instructive combination will be made with an element which may or 
may not govern its fluctuations. 

Coming now to table No. 2, we have the variations of losses to premiums 
for the period covered by table No. 1. There is a marked similarity between 
the two, whether by "good lack or good guiding," I am not prepared to 
say — but it exists. 

In 1871 the losses to premiums reached 60.25, at which time the average 
rate stood at 1.08, as will be seen by reference to table No. 3. This loss ratio 
was followed by a precipitous decline to 27.95 in 1872, caused by the decrease 
shown in table No. 1, and assisted in a measure by the increase in rates to 
1.19, which can be seen on diagram No. 3. In 1873 the decrease continued, 
but this time in spite of an increase in the fire waste, and the cause is found 
in one of our controllable elements, viz: rate, which in that year ran up 
grandly to 1.58. A stili further decliue in the following year brings us to the 
lowest point on record, viz: 24.95, and both fire waste and rate had a hand 
in this. 

From 1874 to 1880 the ratio of losses to premiums seems to have been en- 
tirely a matter of good luck. The rate kept steadily declining during these 
years, if we except a slight break in 1879, and it was only in 1882, when losses 
showed their head above the average line for the first time in ten years, 
that we observe a steady upward slant in rate. The fire waste kept steady 
in 1882 and 1883, and it is curious to note how mindful the underwriters 
are of the welfare of the public at large despite the many abuses heaped 
upon them. Fearing to do an injustice, they kept rates on an even keel as 
shown by the horizontal rate line between these years. 

In 1884 the compact took the reins, and apparently none too soon. The 
rapid rise in losses to premiums from 1884 to 1885 would have been much 
more severely felt had not rates stood at 1.60, being at that time the highest 
point reached. This was still more forcibly true in 1886, when, as we have 
seen, the fire waste reached eighty-six cents and rates 1.68. 

Had this percentage of loss to amount written occurred in 1880 instead of 
1886, and there is no apparent reason why it should not, our loss ratio would 
have been 60 per cent, instead of 32.47. If we add 35 percent, for expenses, 
but few of the general agents would have been able to claim a contingent on 
that year's business. 

We can leave the contemplation of these results with considerable satis- 
faction. While the fire waste in 1887 stood considerably above the average 



of fifty-three and a half cents, and the loss to premiums hung above its av- 
erage of 35.46, both averages are good. The rate of 1.71 is the highest 
yet obtained and stands twenty cents above the average of the seventeen 

The much vexed question as to whether or no the union has caused a 
general advance in rates in this State would seem to be decided in favor of an 
affirmative reply if table No. 3 be taken as reliable evidence. But can it 
be so taken? There are several reasons why it should not be accepted as 
final; for instance, it is just possible that a decrease in rates on well protected 
specials would induce more liberal offering and writing of this class of hazard, 
which would of course operate to increase the average rate on the entire 
business. Again, the acknowledged increase of long term writings would 
have a like effect. 







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If we knew how much of this three and five year business is being written 
in this State at the present time, we could, I think, prove it to be a fact that 
rates, instead of having been increased, as diagram No. 3 apparently shows. 



have actually been decreased. It is unfortunate, however, that these figures 
are not obtainable, but we have a good substitute for them. In diagram 
No. 4 is given the result of figures obtained by taking from the insurance 
commissioner's reports from 1872 to 1887; first the total amount written by 
all companies in each year, in millions of dollars, represented by the dotted 
line; secondly, the amount in force at the end of each year, also in millions 
of dollars, represented by the unbroken line. Now if you will kindly follow 
me up this hill of figures we will find before we get to the top that there is 
extra premium enough here to more than offset the apparent increase in 
annual rate. At the end of 1872 the amount in force was forty-four millions 
less than the amount written during that year, which would indicate a certain 
small amount, perhaps, of long term business carried over from previous 
years; we will assume there was some. In the following year the difference 
was reduced to thirty-one millions, showing an increase in the term business 
of course. From that date until 1877 the lines run almost parallel. The at- 
traction in 1878 was caused partly by a still more liberal writing by all com- 
panies, but more particularly by the California Farmers Mutual. In 1877 that 
company reported seven millions written and eleven millions in force; in 
1878 two millions written and ten millions in force. In 1879 I don't think 
they made a report. I fail to find it. 

Kisks Written and in Force, California Business. Illustrated by Diagram No. 4. 



















































In 1882 we manage to get on the other side of the fence, and from that 
date until the present the lines manifest the utmost aversion for each other. 
At the close of last year the amount in force exceeded the amount written 
by nearly fifty millions of dollars, or a divergence of ninety- four millions 
from the relation they bore to each other in 1872. Nor is this all. If the 
increased amount of short term business arising from large lines written 
on field grain in the last few years be taken into consideration, the differ- 
ence would be greater by at least 50 per cent, of the amount of such lines. 
That business, of course, all went off the books before December 31st 


I venture the assertion that these changes would bring the average rate 
obtained on anunal business in 1887 down to 1.50 per cent., and prove con- 
clusively that the Union has not only equalized but reduced rates in a broad 

Perhaps you do not credit this statement. Let us figure a moment. It 
is a safe proposition to assume from the table before us that there is in force 
to-day in California long term policies aggregating one hundred millions of 
dollars. The extra premium collected on this business in excess of the 
amount chargeable on the same business at annual rates (placed at the low- 
est possible figures, viz., sixty cents on the hundred dollars) would give six 
hundred thousand dollars to be deducted from the income of the companies 
in California business in 1887 in order to arrive at the amount received on 
annual risks. This would reduce the premium receipts to $4,990,000 in 
round numbers, without a corresponding decrease in the amount covered, 
and show an average rate of 1.52. There is enough extra premium left, if 
we could dig it out, to bring this still lower. 

The fluctuations of loss to amount written, the diagram illustrating which 
we left back on the road and now take up again, is a very interesting sub- 
ject. The causes for its rapid changes are hard to find — greed for business, 
careless inspection of risks, "dry years," and dull times have all been 
blamed. Wheat has been for years, and as far back as our tables reach, the 
principal product of California industry. Upon it has rested in a great de- 
gree our prosperity, and when the farmer became " jubilant' ' the rest of the 
State smiled in sympathy. 

Curiosity prompted a comparison between the fluctuations in the price of 
this commodity and the loss ratio, and the result is given in Diagram No. 
5. The unbroken line shows the variation in percentage of loss to amount 
covered, in other words, the fire waste, while the dotted line shows the aver- 
age price of wheat. It will be noticed that the figures representing the price 
of wheat are inverted. This is done so that the relation of the two lines 
may be more closely compared. 

We first observe losses at sixty-five cents, when the average price of wheat 
was $2.20. In the following year wheat rose to $2.34, and losses fell to 
thirty-three cents. In 1873, 1874 and 1875 they rise and fall in the most per- 
fect harmony, the first exception being in 1876, when wheat and loss ratio 
both advanced. Looking for an explanation of this incongruity we find it 
in the disastrous fires in San Francisco, which in that year were 14 per cent, 
above their average. As large fires in commercial centres are either acciden- 
tal or result in the disturbance of statistical tables entirely out of proportion 
to their number, we may conclude that the record for the year in question 
can hardly be called exceptional. 

From that date until 1886 their harmonious intermingling is almost undis- 
turbed. In that year we again find heavy losses in San Francisco, which 
pulls the lines apart, but seemingly tired of the separation, they come togeth- 
er in peace in 1887. 

There may be nothing in all this, but it looks suspiciously like proof that 



Diagram No 5. Loss to amount covered 

Value of wheat per cental 




















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Aveeage Price of No. 1 Wheat in the San Francisco Market for Seventeen 
Years. (See Diagram No. 5.) 

Season. Per cental. 

1870-71 2.20J 

1871-72 2.34 

1872-73 1.76i 

1873-74 2.05i 

1874-75 1.62 

1875-76 1.931 

1876-77 1.92£ 

1877-78 2.18 

1878-79 1.67 

Season. Per cental. 

879-80 1.82 

880-81 1.41| 

881-82 1.60 

882-83 1.73A 

883-84 1.64 1 

884-85 1.31| 

885-86 1.43i 

886-87 1.52J' 



the price of wheat and the fire waste bear closer relationsto each other than 
the companies realize or the honest granger would willingly admit. 

It may be asked how it happens that heavy losses follow so closely the 
reduction in the price of wheat. Should not some time elapse before the 
influence is felt, if it has any influence? I will explain. The wheat tables 
are made up at the end of «ach wheat season, which closes on June 30th, 
our loss figures being completed, of course, on December 31st, six months 
later. This would give ample time for any reaction, adverse or otherwise, 
in the frequency and severity of our infliction before our books are closed 
for the year. I leave this subject for your consideration, in the hope that 
it may throw some little light on the cause of our troubles, even though a 
remedy does not follow. 

Diagram No. 6. Loss to Premium. 

San Francisco California, except San 

- Coast outside of California 

















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Table of California Business Segregated— Illustrated by Diagram No. 6. 













































































































































Diagram No. 6 looks a little complicated, but it is easy. This proves where 
our profits come from and where we squander them. It is all very well 
to say that our loss ratio on California business has been so and so, or on 
coast business so much, but the important question is, what part of Califor- 
nia or the Coast is keeping down an excessive loss ratio in the other part. 
This table shows it. 

The dotted line represents the variation in percentage of losses to pre- 
miums in San Francisco for the past thirteen years (as far back aswe can 
go), with an average for the term of 27.47. The dash line shows the same 
variations on California business outside of San Francisco, with an average 
of 42.99, while the unbroken line on top gives our experience on the Coast 
outside of California, the average on this being 50.25. On the latter busi- 
ness we canjonly go back to 1880, the Coast Reviewtables extending no fur- 
ther, but there is enough of it to show how particularly lively a line it can 

It will be noticed that throughout the entire period San Francisco losses 
have kept well under the record of the remainder of theState, and only once 
did they reach as high a ratio. On the other hand, the very lowest point 
reached by the State only touches the average for the city, and at once bounds 
back to its old habits." ? |The Coast business outside of California has an ugly 
look, and from its contact with the average California line in 1881, it seems 
to have gained an impetus that sent it through the succeeding years with 
an amazing disregard of the consequences. 

There are several lessons to be drawn from this table, but we will be con- 
tent with a slight reference to one — the others can be figured out by the man- 
agers at their leisure. 



As we have observed, the Coast losses outside of California for the last 
weight years average 50.25, while the rate obtained ran from 2.10 to 2.43, and 
-averaged 2.25 as shown by table No. 7. 

Diagram No. 7. Showing fluctuation in rate on Coast business outside of California. 





















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Coast Business Outside of California. Illustrated by Diagram 7. 









































The fluctuations in rate in this territory are somewhat violent, and pre- 
sent a strong contrast to the sedate movement of the California rate table 
during the same period. This, however, is only in keeping with the lively 
motion of the loss line in the States and Territories surrounding us, and 
indicates an unsettled state of the business. 

A decline in rate will be noticed during the past year to 2.27, and if this 
is an indication of still further reduction in the future, it would be advisable 
to call a halt. The profits in this part of our field have never been excess- 
ive or even satisfactory (to individual companies), and the compact will be 



consulting our best interests by taking these facts into consideration. Our 
experience with this territory, if it teaches us anything, teaches us that rates 
have not been adequate, and a reduction would be ill-advised. 

Diagram No. 8. San Francisco Loss Loss paid by Insurance Companies 

Loss not covered 











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The extremely low average of losses to premiums in this city during the 
past thirteen years is worthy of more than a passing notice. It is equally as 
important to look into the causes which produce success as those which result 
in defeat, as by this means we may be induced to not only give credit where 
it belongs, but continue to cultivate every element in our favor. 

It is a matter of considerable difficulty to trace from the figures at our 
command the causes which have led to the uniform profitable result of this 
business. In the first place we have no figures representing the liability 
incurred by the companies in the city from year to year, and are therefore 



tinable to say with any degree of certainty that our profits come alone from 
a fully adequate rate. 

Again, the figures from the assessor's office show such unreasonable fluctu- 
ations that they cannot be depended upon as evidence of the value of insu- 
rable property, and in consequence we are unable to correctly estimate the 
fire waste. Were either of these tables procurable and correct, it would be 
no difficult matter to prove one of two things, either that our profits on 
San Francisco business depend upon a fairly adequate rate, aided by the 
services of the fire patrol, or that the salvages obtained through its services 
are more than offset by a reduction in lines and consequently rates are ex- 

This question of the value of the patrol to the underwriters has been dis- 
cussed from time to time, whether seriously or not I can not tell, and while 
there is no attempt in the following table (No. 8), to prove beyond a doubt 
that it is a good investment, still the inference to be drawn therefrom is 
largely in favor of that conclusion. 

Digest of San Francisco Losses for Seventeen Years — Obtained from Fire Mar- 
shal's Reports, and Illustratfd by Diagram No. 8. 



















































































































































The unbroken line shows the percentage of actual loss (during the desig- 
nated years) to the insurance under fire at the time and place these losses 
occurred. The dotted line shows the loss paid by insurance companies in 
these fires, while the dashes show the amount of property destroyed and not 
insured. The percentages of the two lower lines added together equal of 
course the upper. 

In 1871 we find that the percentage of loss to insuranoe under fire was 57 
percent., and that the losses amounted to $1,350,000 in round figures; of this 
sum the companies paid $695,000 or 29 percent., and $654,000 or 28 per cent, 
was borne by the property-owners of San Francisco who had no insurance. 

The patrol was organized in 1875, and in that and the succeeding year does 


not seem to have covered itself with glory, if the elevation of the unbroken 
line pointing to 46 and 55 per cent, loss to insurance is any criterion. For 
the next nine years, however, we have a line so steadily low as to excite our 
admiration and prompt the question, if the fire patrol did not do it, what 
did ? The year 1886 and its experiences are still fresh in our memories. The 
Bancroft, Tatum & Bowen and Brannan street fires caused a loss of $1,700,- 
000, which was quite enough to account for the pinnacle standing under that 

It is not to this question of salvage, however, that your attention is called 
(even its enemies will accord to the patrol its meed of praise on that head), 
but to the important one as to whether the existence of the patrol is not 
causing a very material reduction in lines offered for protection by the mer- 
chants of San Francisco. The two lower lines on the diagram will, I think, 
settle that question definitely. As before stated, the dotted line shows the 
amount paid by the companies, and the dashes the amount destroyed but 
not covered in each year; the two amounts added being equal to the percent- 
age indicated by the unbroken line. 

In '71 we find the two lines almost together; in '72 the people suffered a 
greater loss than the companies, indicating insufficient protection. In the 
following three years the companies paid the heaviest proportion, while in 
'76 the amounts are almost equal, but with the citizens' line still underneath, 
and it so remains until r 85 and '86, when, after a spurt during these years 
it returns to its old position in '87. 

Now, what does this prove? Simply this, that the citizens of San Francisco 
are to-day suffering no greater loss, in proportion to the amount destroyed, 
than they were previous to the organization of the patrol; in other words, 
they are being as fully protected by insurance in '87 as they were in '71. If 
this were not so we should expect to see the line indicating their proportion 
of the loss gradually gaining upon and at length surmounting that of the 
companies. This being the case, it is safe to assume that while in individual 
cases merchants take advantage of the protection provided by the insurance 
companies in the shape of patrol covers, still the practice is not sufficiently 
general to seriously affect our income or justify a change of policy in this 

In closing this imperfect survey of the past, there is one matter which I 
think demands our attention. It is a popular cry that the insurance 
companies are making to-day, and always have made, too much money 
in California. This is a feeling prevailing not alone among the public in 
general, but even some of our own members, with ill-considered haste, 
advocate a general break in rates and a return to the practices of a few years 
back. And why? Because a certain gross profit can be figured up on busi- 
ness transacted in this city and State in the years gone by. That is all. 
Because this is so, we are asked numerous questions regarding the correct- 
ness of this, and the advisability of that, and all based upon the supposition 
that losses in the years to come will by some kiud dispensation of Prov- 


idence be kept down to the average of the past. Can this be expected? Is 
it not a fact that the fire waste in this State has been abnormally low, when 
compared with that of other States in the same, or even in a more advanced 
stage of development? Is it not a fact that we may reasonably expect a 
larger percentage of loss to property valuation when avenues of trade here- 
tofore easy of access become crowded, and when increased competition in 
business forces more frequent sales to the insurance companies ? 

Apart from this, however, it can hardly be considered good underwriting 
to cut out the profitable risks from the classification sheet, or re-rate the 
good towns in a State, because we make a little money in them. We have 
enough poor risks and poor towns to pull down the average profit, and so 
have companies, who are doing a general business, enough poor States to 
knock our little profit out of sight. It is not claimed that California should 
suffer now and forever in the matter of rates because other parts of the 
Union have high loss ratios, but may not our day of disaster come at any 
time, and our excellent average become a thing of the past ? 

In short, it is not well to reduce rates, destroy the compact, or emulate 
our friends in the East, just because California happens at the present mo- 
ment to be one of the gilt-edged risks in the classification of States. 

W. H. Lowden. 

The paper was received with applause. 

The President — Gentlemen, I want to say a word with 
reference to this paper. It is one of the best that we have 
ever had since this Association was formed. It is due to 
Mr. Lowden that we now take cognizance of this, and ex- 
press the feelings of the Association in this respect. 

Mr. Faymonville — I move that the thanks of the Associa- 
tion be tendered to Mr. Lowden for the paper read to us. 
Motion seconded. 

The President — The motion is hardly in the words I 
would like. I would have liked to hear it a little more 
warmly expressed, and with the permission of the mover I 
will put it that the "unbounded thanks" of the Association 
are tendered to Mr. Lowden for his report. 

Motion put and carried. 

Mr. Lowden — I am very much obliged. 
Mr. Sexton — The report deserves a little more than a 
vote of thanks. The tables are valuable. 


Col. Kinne — I would like to ask if Mr. Lowden will 
kindly furnish the diagrams in such shape that they can be 
properly engraved and printed in our proceedings. There 
are a great many of them here, and some — 5, 6 and 8—1 
think, are of special importance, it seems to me, to the in- 
surance fraternity, no matter whether they belong to the 
Association or the Insurance Union. I trust it will be put 
in such a shape that they can be placed on blanks an(J 
engraved and printed in our proceedings, at our expense, of 
course. I think it ought to be done. No. 6 shows that the 
insurance loss depends largely on the agricultural pursuits 
of this country. With the gentleman's usual modesty and 
nonchalance, he jerks the diagrams down to the floor. We 
don't want them to remain on the floor; we want them in 
such a position that we can have them in our proceedings. 
If there is any motion necessary to go to the additional ex- 
pense, I will make it, that the Association get the engrav- 
ings for our proceedings. The Coast Review may possibly 
want them, and if so, it can bear part of the expense. 

Mr. Chalmers — In addition to that, I will make a motion 
that the paper of Mr. Lowden be published separately as ^ 
pamphlet and sent throughout the country. 

Col. Kinne — I want these published in the proceedings. 
Afterwards Mr. Chalmers can make a motion to publish it 
separately; I don't claim any credit for that motion. 

Mr. E. V. Watt — I wish to second the motion. Before 
Mr. Lowden sat down I thought of it, and asked him if he 
had a reduced size of the diagrams, so that they could be 
used for the purpose, and he says he has them, so there will 
be no difficulty in getting the copies. 

Mr. L. B. Edwards — I am anxious to have these dia- 
grams published in the entire proceedings, or nothing. The 
Association was organized a long while ago. The active 
members of it know that it has been of great advantage to 


the underwriting fraternity on this Coast. It has brought 
about almost a revolution in the practice of the special 
agent; yet we have some underwriters in San Francisco, 
strange to say, who don't believe it yet. They don't 
believe that any good can come from these meetings 
of ours. They don't believe that the brains of the pro- 
fession lie in this organization or any part of it. Here 
is something that has been produced under the auspices 
of this Association that is far superior to anything of any 
individual class of underwriters on this Coast, and I want 
them to look for a little information to us. They some- 
times can receive it, and I want this laid before them as 
coming from this Association. 

The President — You have heard the motion that the dia- 
grams be published in the general proceedings of the Asso- 
ciation. All in favor say "Aye." 

Motion carried. 

Mr. Chalmers — I now move that 500 copies be published 
in pamphlet form. 

Mr. J. G. Edwards— I want to say that the diagrams will 
appear in the next issue of the Coast Review, and the asso- 
ciation then can use the blocks. 

Mr. Lowden — I hardly think it necessary to print a sep- 
arate edition at the expense of the association. People 
don't carry these things around with them. 

Mr. L. B. Edwards—We will have it published in the 
proceedings of the association and in the Coast Review. 
Our Secretary made the report that our expenses were likely 
to overlap our income. I think everybody will get it from 
that source. 

Col. Kinne — For the same reasons that Mr. Edwards has 
advanced I believe that every one that is interested in the 
matter has taken the Coast Review in the past or will sub- 


scribe for it in the future. At the same time the proceed- 
ings will be published, and every one interested will receive 
a copy. As Mr. Lowden says, we do not carry them around 
with us. We study them, and think about them, and learn 
all we can, and if we cannot carry the meat of these papers 
in our brains, there is no earthly use in carrying them about 
for a gripsack won't hold all that some of our members 
ought to know. It seems to me, if it is published in the 
Coast Review, and we publish our proceedings, which has 
been our method in the past, provision can be made for 
extra copies. And there are lots of good things besides 
Mr. Lowden's paper by other members. Each of us gets 
one or two of the copies, and if we want more we can buy 
them. It seems to me it would be a good plan to pursue, 
and if any of Mr. Lowden's friends want these, he can buy 
them and send them around; he will get glory enough. If 
any of the companies want them, they can buy a few copies; 
it won't cost them much, but there are very few companies 
that need any brains, more than they have. I think the 
motion of Mr. Chalmers ought to be withdrawn by him. I 
am not suggesting anything. 

Mr. Chalmers — After the very eloquent remarks of Col. 
Kinne, I withdraw that motion. 

The Chair — Having nothing before the house, we will 
proceed to the reading of the other paper from the same 

Mr. A. D. Smith — Our Chairman, in his opening re- 
marks, stated that there would be expected from the com- 
mittee on Statistics, ratio and statistics and figures. In that 
you were not disappointed. I fear, however, in the paper 
which I shall present to you that you will be disappointed, 
so far as ratios and percentages are concerned. And with 
this preparation for disappointment, I respectfully submit 
this paper, which I have entitled 



Knowledge of the past enables us to judge of the future— and to no class 
of human affairs does this truism apply with greater force than to the insur- 
ance business. 

Were all insurance experience of the past blotted out to-day, the under- 
writer of to-morrow would be as helplessly adrift as the ship in mid-ocean, 
whose pilot and chart are gone, and whose reckoning and compass are lost. 

When we witness the mighty structures of iron and steel that to-day 
plough the deep — the results of the combined naval engineering skill of the 
world, with all the advantages given by the wonderful advances made in 
these modern times in the world of scientific discovery — starting out on no 
unknown path; but over a route well beaten; whose rocks and shoals, and 
tides and currents are all marked down, and then cast a retrospective glance 
at the frail bark that nearly four centuries ago sailed from the port of Palos, 
out into the unknown seas, with no chart to guide, a mere cockle-shell, in 
which the seaman of to-day would hesitate to venture beyond the sight of 
land: we cannot but be wrapt in admiration of the boldness and daring of 
Columbus and the early navigators. 

So, too, in our own business: when we consider the valuable data we have 
acquired by means of the experience of the past, our knowledge of the law 
of probabilities, the advantages we have in the present day, in the way of 
facilities for extinguishing fires, and the improved methods in the construc- 
tion of buildings, etc., and then look back to the infancy of fire insurance; 
we cannot but wonder at the daring of those who first signed contracts guar- 
anteeing their neighbors indemnity against loss by fire. 

Since Columbus, however, spread his sails and drifted out into the un- 
known waters beyond the setting sun; those and the other seas have been 
fully explored, until every bay and inlet of the habitable globe is known; 
every headland and islet and dangerous rock and eddy and shoal mapped 
out and marked with warning signal; the width, direction and speed of every 
ocean current and stream marked down; the fog-banks and the track of the 
trade winds and other prevailing air currents noted. Even the wars of the ele- 
ments and their battle-grounds — or waters — have been calculated to a nicety : 
the birthplace and spiral course of the cyclone is discovered, as is the season 
when the typhoon leaves its native lair, and goes forth seeking whom and 
what it may devour. Continents have been severed to shorten the naviga- 
tor's voyage; the ocean bed traversed with electric cables to enable him to 
select, at best advantage, his cargo and port of destination. 

In lieu of the oar of the galley slave, as an auxiliary to his canvas, the 
giant steam now shortens time and space, and mocks at the head winds and 
adverse currents that baffled the argosies of old. 

The clumsy and top-heavy craft of former generations, with their three 
and four-storied pagoda-like prows towering aloft, challenging both wind and 
wave, have given place to the beautiful models of the naval architects' skill 


of the present day; with their clean cut and graceful lines, offering the least 
resistance to the yielding water. 

England no longer boasts of her wooden walls, but presents to her foes a 
bulwark of steel, and wrought metal, to a great-extent, supplants the oak and 
teak of which the merchant fleets were formerly constructed. 

In short, the navigator of the present day has all the benefit of the ex- 
plorations and discoveries and inventions of all these centuries; the ocean 
is reduced to a mere highway, with its bearings almost as plainly marked, 
and its ruts and furrows almost as distinctly indicated as those of the 
thoroughfare of a great city. 

The modern steamship is the perfection of the builder's art, and naviga- 
tion is reduced to an exact science. 

But in these corresponding years, since the first insurer made his gam- 
bling bet with his neighbor; have we; in the fire underwriting business, 
made equal strides of advancement with the toilers of the sea ? 
Have we kept up in the race ? Have we not lagged behind ? 
Have we called to our assistance such a valuable auxiliary as is steam to 
the navigator? 

Instead of stemming the tide, are we not, with sails unfilled, drifting with 
the current? 

As two of the galleons of old, of the same tonnage and with equally intel- 
ligent masters and skilled crews, might have sailed, on the same day, from 
the same port, for the same destination, and yet have met with adventures 
entirely different in character; so of the early insurers: two of like ability 
and resources and with similar views, might enter upon the same field, 
writing upon similar classes of risks and in the same amounts, and yet at 
the end of the year show results widely divergent. 

But in these modern days we have frequent instances of vessels sailing 
together from the same port, almost circumnavigating the globe, and arriving 
at the same destination within a few hours of each other: while of the two 
underwriters of to-day, although working side by side; one closes the year 
with a largely increased surplus, while the other shows a largely impaired 

While the navigator has been carefully profiting by the knowledge ac- 
quired from day to